Wall Street to open higher on Fed's 'gradual' rate-hike outlook


Wall Street to open higher on Fed's 'gradual' rate-hike outlook

The Fed also released the FOMC members' latest interest rate forecasts, which suggested the USA central bank is now expected to carry out two more interest rate hikes during this year for a total of three increases, unchanged from the previous outlook.

That helped Amsterdam's AEX stock index climb to its highest level in more than nine years, while both Germany's DAX and France's CAC 40 hit their highest levels since mid-2015 as fears eased that the euro zone was heading inexorably towards a break-up. The dollar fell 0.5 percent against a basket of key currencies, adding to Wednesday's steep slide after the Fed's decision. The Australian dollar stood at $0.7676, having gained 2 percent on Wednesday trading in NY. Shares of big USA banks, which slipped on the less hawkish-than-expected stance on Wednesday, were up about 0.7 percent.

Precious metals prices climbed on Thursday to their highest level in over a week after the United States central bank signalled only gradual rate tightening and the dollar slid to its lowest in five weeks.

Shares of Tesla rose 2.8 per cent to US$262.94 (RM1,166) after the electric carmaker said it would raise about US$1.15 billion as the company speeds up the launch of its Model 3 sedan.

Taylor expects gains for the 10-year Treasury yield to remain modest, even with the Fed pledging more increases.

The euro was also buoyed by the Dutch election which gave Prime Minister Mark Rutte a victory over far-right rival Geert Wilders.

The Dow Jones industrial average rose 9 points, or less than 0.1 percent, to 20,943.

Prices on benchmark 10-year Treasuries rose 17/32 to yield 2.533 percent, from 2.595 percent late on Tuesday. After Britain's vote in summer to exit the European Union, investors wondered whether the Dutch election and others scheduled later this year on the continent could lead the European Union to break apart. The bank cited the Fed's rate hike and improved Chinese economic conditions.

"It seems to us that this is a classic "buy the rumour, sell the fact" scenario as we can not help but think the market is heavily long of dollars", said Stephen Simonis, chief currency consultant with online FX trader FXDD Global. The central bank's statement and forecasts for future rate increases was seen as less aggressive than had been anticipated. On the Nasdaq, 1,349 issues rose and 851 fell. The Euro Stoxx 50 Index advanced 0.9%. The precious metals had lost ₹ 400 in last two days.

At German lender Commerzbank AG, currency analyst Antje Praefcke also said that "the euro seemed unimpressed" Thursday, but warned that the euro remains vulnerable because "political risks in the eurozone remain high with a view to the French elections".



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