Asian Currencies Weaken on Prospects That Fed May Not Be in Hurry to Cut Rates
By Ronnie Harui
Asian currencies weakened Thursday amid prospects that the Federal Reserve may not be in a hurry to lower interest rates going forward after its half-percentage-point cut on Wednesday.
Against the greenback, the Japanese yen dropped 0.9%, the Korean won fell 0.7% and the Singapore dollar declined 0.2%.
"Fed Chair Jerome Powell indicated at the press conference that he is in no rush to aggressively lower rates despite the bigger-than-expected initial cut," analysts at Commerzbank Research said in a note.
Eleven of 12 Fed voters supported the rate cut, which brings the benchmark federal-funds rate to a range between 4.75% and 5.00%. Quarterly projections released Wednesday showed a narrow majority of Fed officials penciled in rate cuts of at least a quarter-percentage-point each at meetings in November and December.
Markets' reaction following the Fed meeting was "notable as well, with some sell-off in U.S. rates, lower equity markets, together with a stronger dollar," said Michael Wan, senior currency analyst at MUFG Bank, in a research report.
"All these perhaps are indicative of markets which have already gone quite far in pricing for rate cuts, and maybe some tentative positioning adjustments," Wan said.
Write to Ronnie Harui at ronnie.harui@wsj.com
(END) Dow Jones Newswires
September 18, 2024 22:26 ET (02:26 GMT)
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