Investors Watch Fed Meeting, Dollar Movements

Signaling for the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group Inc. (JPX), is displayed outside the Tokyo Stock Exchange, Japan, on Friday, October 2, 2020.

Akio Kon | Bloomberg via Getty Images

SINGAPORE – Asia-Pacific markets rose on Monday ahead of this week’s Federal Reserve meeting in the United States.

Australian stocks cut some losses as the benchmark ASX 200 traded nearly flat. The energy sector gained 0.77% while the materials sector fell 0.89%. The heavily weighted finance sub-index eased losses to trade at 0.2%.

Japanese markets rose in early trading, where the Nikkei 225 posted a 0.53% gain before trading near the flat line. The Topix index added 0.21%. In South Korea, the Kospi fell 0.31%.

The Federal Open Market Committee will meet on March 16 and 17 and some analysts expect the US central bank to revise its GDP forecast upward, following a $ 1.9 trillion fiscal stimulus package that will send direct payments of up to $ 1,400 to most Americans.

“Some members of the FOMC might think that rates will have to go higher sooner than they anticipated last December,” ANZ Research analysts wrote in a morning note.

“For the Fed, the strong recovery and any change in momentum in the dot plot profile will pose communication challenges about how long rates will stay low,” analysts said.

Each quarter, FOMC members forecast where interest rates will go in the short, medium, and long term. These projections are represented visually in graphs and are called dot graphs.

Fed Chairman Jerome Powell “is likely to link the path of rates to comprehensive economic improvement while emphasizing tolerance for a modest overshoot in inflation,” the ANZ analysts added.

Coins and oil

In the currency market, the US dollar was almost flat at 91.630 against a basket of its peers, falling from levels above 92.00 last week.

The Japanese yen weakened to the 109 level, trading at 109.04 against the dollar compared to a previous high around 108.97. Meanwhile, Australian dollars changed hands at $ 0.7767, rising from a previous level of around $ 0.7737.

Oil prices rose during Asian business hours on Monday on growing optimism around the recovery in demand. US crude rose 0.37% to $ 65.85 a barrel.


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