By Administrator_India

Capital Sands

 

Asian stocks were boosted by the promise of ultra-easy monetary policy globally as the U.S. Federal Reserve left interest rates near zero to support the country’s virus-battered economy, sending the dollar to a two-year trough.

All Fed members voted to leave the target range for short-term rates between 0% and 0.25%, where it has been since March 15 when the virus was beginning to hit the nation.

The unchanged policy setting together with a pledge the Fed would use its “full range of tools” if needed boosted risk appetite overnight with all three Wall Street indexes finishing firmer.

The confidence extended in Asia where Japan’s Nikkei and South Korea’s KOSPI were up 0.3% each, Australia’s main index climbed 0.7% and Hong Kong’s Hang Seng index rose 0.2%.

Chinese shares were a shade firmer, leaving MSCI’s broadest index of Asia Pacific shares outside of Japan up 0.4%.

Indeed, negotiations for a new coronavirus relief package in the United States have become a pressing issue for investors.

U.S. President Donald Trump said on Wednesday that his administration and Democrats in Congress were still “far apart” on a new coronavirus relief bill.

The dollar has been tumbling on expectations the Fed will continue its ultra loose monetary policy for years to come and on speculation it will allow inflation to run higher than it has previously indicated before raising interest rates.

Wednesday’s Fed move sent the dollar index crashing to 93.17, the weakest since June 2018. It recouped some of the losses and was last at 93.398.

The greenback weakness supported the euro at $1.1792. The common currency had hit a two-year high of $1.1807 and is on course to post its biggest monthly gain in 10 years, having risen about 5% so far this month.

Sterling also held firm against the dollar at $1.2998, just below Wednesday’s 4-1/2-month high of $1.3013.

In commodity markets, oil prices rose after a steep drop in U.S. crude inventories, but another record day for coronavirus cases worldwide kept gains in check.

Brent crude futures were up 4 cents at $43.79 a barrel. U.S. crude futures inched up 1 cent to $41.28.

Spot gold was off 0.4% at $1,962.6 an ounce.