Dollar, yen weaker as markets weigh Fed, BoJ moves

The U.S. Federal Reserve made the decision to hold rates at the conclusion of its monetary policy meeting on Wednesday.

EDF inched 0.4 per cent higher, underperforming the market after the French nuclear power utility said it was cutting its 2016 earnings expectations due to lower output.

"The Fed probably appeared less hawkish than what the markets had expected", said Ryan Larson, head of equity trading at RBC Global Asset Management in Chicago.

The Fed also reduced the number of rate increases to one, down from two. Investors are now looking ahead to the release next week of a raft of economic data, such as monthly US consumer confidence and durable goods orders and Chinese factory activity, for the latest insights on the world economy's health.

Not surprisingly, the USA gross domestic product forecast was cut to 1.8 per cent this year due to weak growth in the first half, and the Fed rolled back the number of rate hikes next year from three to two. Now it is down to just three.

The dollar gained 0.5% against the yen to Yen100.828, following a steep decline in the previous session. "The FOMC is unlikely to deliver anything more than a very "dovish" December hike".

"A December move appears increasingly likely, especially if the US economy maintains its current pace". The Fed's less-aggressive approach to rate increases is seen as less of a threat to the yellow metal's pricing.

That knocked the dollar nearly across the board as investors reduced their expectations for USA interest rates. Still, some economists cheer the delay, saying higher interest rates may spell more pain for the region, which is already suffering from the structural slowdown in China and subdued global growth.

Spot gold was down 0.2 percent at $1,333.86 an ounce by 0053 GMT. Shares of Transocean Ltd. finished up 5.6%, Murphy Oil Corp. shares rose 4.3%, Diamond Offshore Drilling Inc. advanced 2.7%, and ConocoPhillips closed up 2.4%.

The Russian energy minister's comments in support of coordinated action boosted oil further.

NEW YORK, Sept 23 The dollar index whipsawed through the day but ended up little moved on Friday from its late Thursday levels as investors kept positions tight ahead of Monday's USA presidential debate. In China, the Shanghai Composite Index fell 0.06%, while Hong Kong's Hang Seng Index rose 0.06%.

The Norwegian krone strengthened 1.8% against the dollar to $0.1234 after Norway's central bank left its main interest rate steady and suggested further reductions may no longer be needed because of a pickup in the economy.

Turkey is expected to cut its interest rates again later.

Decisions by the Fed and the Bank of Japan on Wednesday helped reassure investors that major central banks weren't imminently pulling back from easy-money policies.

  • Anthony Vega