HONG KONG: Asian markets rallied and the dollar sank Thursday after the Federal Reserve lifted US interest rates but gave a more dovish outlook for future hikes, while the euro was also boosted by the expected victory of the incumbent party in Dutch elections.
After a much-anticipated meeting the US central bank lifted borrowing costs by a quarter of a point but suggested only another two rises this year, confounding talk of a possible three or four.
Fed boss Janet Yellen also said that while President Donald Trump’s planned big-spending, tax-cutting plans could fuel growth and inflation, she would keep a wait-and-see attitude before making any decisions on how to shape monetary policy.
The news, which came with an upbeat assessment of the world’s top economy, fired US stocks and sent the greenback tumbling in US trade.
And that continued into Asian business, with Hong Kong up 1.7 percent, Shanghai adding 0.8 percent and Seoul advancing 0.8 percent. Sydney ticked up 0.2 percent and Singapore was 0.8 percent higher, while there were also big gains in Wellington, Taipei, Jakarta and Manila.
“Whether folks agree or disagree with the need to hike, the key here is that the Fed has signalled to markets, and importantly US and global businesses, that it is in control and the economy is moving as expected,” said Greg McKenna, chief market strategist at AxiTrader, in a note.—Agencies
