Euro drops, stocks rise as European Central Bank vows to keep rates low

17 June, 2018, 11:40 | Author: Barbara Daniel
  • All Eyes are on Powell

The yen was 0.2 per cent weaker at ¥110.56 per dollar.

The biggest complication could be a murky economic outlook, muddied by the developing trade war, a populist challenge from Italy's new government and softening export demand.

The Euro US Dollar (EUR/USD) exchange rate climbed on Thursday, reversing yesterday's brief fall after US Fed Chairman Jerome Powell stressed than an inflation overshoot will be allowed.

The meeting comes one day after the USA central bank raised rates, citing May's jobs report as a sign that the American economy continues to improve.

In a rare merging of the sports and trading worlds, markets are gearing up for soccer's World Cup in Russian Federation, where time zone differences mean more matches during European, US and Latin American trading hours than any previous tournament.

Expectations of higher U.S. interest rates are also helping to make the U.S. Dollar a more attractive investment.

Signalling the move would not mean rapid policy tightening in the coming months, the European Central Bank also said that interest rates would stay at record lows at least through the summer of 2019, suggesting protracted support for the economy, even if at a lower level.

Interest rates remained unchanged at the ECB's June meeting.

"The euro showed such a big reaction to the European Central Bank meeting as its stance came in sharp contrast to the Federal Reserve, which had struck a hawkish tone just the day before", said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.

US President Donald Trump has made up his mind to impose "pretty significant" tariffs and will unveil a list targeting US$50 billion (RM199 billion) of Chinese goods today, an administration official said.

A broader slowdown could make it harder for the ECB to cut support if lower growth eases pressure on inflation, a threat to the bank's credibility as it has missed its inflation target of nearly 2 percent for over five years. Tokyo ended 0.5 percent higher and Sydney added more than one percent.

The ECB said it would end its bond buying program by December but interest rates would stay on hold "through the summer of 2019".

It also highlighted the divergence in monetary policies between the hawkish U.S. Federal Reserve and the dovish European Central Bank. The central banks are withdrawing stimulus efforts that started during the Great Recession as their economies strengthen.

The rise in the value of the United States dollar, therefore, did not come from the fact that the Federal Reserve expects to continue raising its short-term policy rate through 2019.

Oil markets edged up, despite the strengthening dollar and fears that Opec countries could decide to increase output at a meeting next week.

West Texas Intermediate (WTI) crude oil futures were up 0.1% at $66.93 a barrel, while Brent was down 0.1% at $75.87.

Recommended:

  • Trump searches for credit on North Korea nuclear deal

    Trump searches for credit on North Korea nuclear deal

    Maybe we are going to have to try it, '" he later said , recounting the outrage that followed. "I saved us a lot of money". The Korean crisis began to thaw at the start of 2018 when Kim announced his decision to resume talks on denuclearization.
    Kim 'open' to dialogue with Japan

    Kim 'open' to dialogue with Japan

    Up until now, China's government has scrambled to keep up with rapidly escalating tensions between the US and North Korea. The US Secretary of State also held a trilateral meeting with the South Korean and Japanese foreign ministers.
    The Elder Scrolls Online is getting Wolfhunter and Murkmire expansions this year

    The Elder Scrolls Online is getting Wolfhunter and Murkmire expansions this year

    Given that we didn't know if we would see a new Elder Scrolls title anytime in the next five years, this is welcome news indeed. Truth be told, none of us should be surprised that Bethesda is working on a new Elder Scrolls game .
  • Larry Kudlow calls Justin Trudeau's verbal attacks 'amateurish,' a 'betrayal'

    Larry Kudlow calls Justin Trudeau's verbal attacks 'amateurish,' a 'betrayal'

    The president has accused Canada of taking advantage of American workers through their trade practices. Raja Krishnamoorthi, D-Ill., accused Trudeau of endangering the economies of both the USA and Canada.
    A letter to Anthony Bourdain

    A letter to Anthony Bourdain

    The former No Reservations host and Busia were married for nine years before splitting in 2016 and shared daughter Ariane, 11. Argento said she was "beyond devastated" by his death and asked for privacy both for herself and his family.
    'One-time shot' for peace with North Korea

    'One-time shot' for peace with North Korea

    The bodyguards were glimpsed flanking Kim's Mercedes-Benz limousine as it traveled to the St. But some U.S. officials have questioned whether Trump was doing enough to get up to speed.
  • Donald Trump, Kim Jong Un come together for momentous summit

    Donald Trump, Kim Jong Un come together for momentous summit

    Kim stood silently alongside, but the North Korean leader had earlier described their meeting as a "a good prelude to peace". The North Korea leader said through a translator that the document "heralds a new start, leaving the past behind".
    Ghana football boss resigns after being banned by FIFA

    Ghana football boss resigns after being banned by FIFA

    Mr Nyantakyi has not replied to multiple requests for comment while the GFA has said it would cooperate with any investigation. Ministers and Deputy Ministers of State for indiscretion in associating them with the private conversations on the video.
    Bethesda Teases Fallout 76 Yet Again

    Bethesda Teases Fallout 76 Yet Again

    Bethesda also shared that a beta , or Break-it Early Test Application, will be available in a Fallout 76 Power Armor Edition. Players won't see a server list when they boot up the game, but their progression will be saved nonetheless.
  • FG declares Friday, Monday public holidays

    FG declares Friday, Monday public holidays

    In Pakistan, the Pakistan Meteorological Department said that it is unlikely that the Shawal moon will be sighted on Thursday. Eid ul-Fitr, an important religious holiday celebrated by Muslims worldwide, marks the end of fasting month of Ramzan .
    Everything Ubisoft announced at its E3 2018 press briefing

    Everything Ubisoft announced at its E3 2018 press briefing

    After a world premiere trailer that introduced Odyssey , we received our first look at its gameplay. Eastern with the Ubisoft E3 2018 Conference, live from the Orpheum Theater in Los Angeles.
    Arab teams' best showing at World Cup is marketing dream for brands

    Arab teams' best showing at World Cup is marketing dream for brands

    The underlying theme of celebrating not only football but also the host country will be represented by a performance from Garifullina.


Popular

FIFA World Cup starts with colourful ceremony
The World Cup got under way after British pop singer Robbie Williams took centre stage at the opening ceremony . Substitute Denis Cheryshev rifled home a second shortly before half-time.

Hillary Clinton-email report set to be released
Report earlier today", White House press secretary Sarah Sanders said in a press briefing Thursday. Comey, in his own response, says the IG report seems fair, but he disagrees with parts of it.

Kim Jong Un willing to hold summit with Abe:The Asahi Shimbun
Forces Japan and other allies and partners in the region that would be necessary to the national defense should war break out".

AT&T Wins in Court to Merge With Time Warner
Leon rejected the government's position, which could lead to a flurry of entertainment mergers. It claims about 25 million of the 90 million or so USA households that are pay-TV customers.

Super Mario Party Is the Ultimate Party Game for Nintendo Switch
It wouldn't be a Nintendo E3 conference, after all, without some awkward teenagers huddled around a Switch pretending to have fun. Smash Bros . is a game made for the Nintendo Switch and will doubtless be one of the biggest releases of the holiday period.

China wasn’t at the table but Trump-Kim talks reinforced its role
Complete denuclearisation must mean the irreversible dismantlement of Pyongyang's nuclear weapons program. If things turn out well, Trump will be encouraged to pursue similar tough terms with Iran.

Kim Jong-un's Interpreter in the Spotlight
Then at the last moment Mr Kim's sister, Kim Yo-jong, pulled a pen from her pocket which she gave to her brother. On Tuesday, the two leaders will begin their meeting with a one-on-one session at 9 am local time.

United Kingdom justice minister resigns over Brexit ahead of key votes
The result followed a day of high drama as a justice minister in May's government resigned in order to back the amendment. In between discussions, he spoke to ministers on the front benches, including May, scribbling notes on a Commons paper.

Manafort faces new charges in Russia probe
They could also be an effort by Mueller to induce a guilty plea and secure the testimony of a critical campaign adviser to Trump. Kilimnik, a Russian intelligence asset, is now under the protection of Moscow and unlikely to ever see an American court room.

Guardiola responds to Toure's allegations
He'll never admit it [not liking Africans]. "I was at a fantastic age in which I was taking on the world. Speaking to TV3 (h/t Fay), the City boss denied the suggestions made by the Ivory Coast global .