Stocks fall, dollar pares losses after Fed decision


Tokyo's Nikkei index closed up 0.6 percent, with the yen weakening after the Bank of Japan refused to alter its accommodative monetary policy.

EUR Fails to Find Support in Eurozone Data The Euro has failed to hold its best levels in months this week due to a lack of strong influential data. The rupee opened at 64.34 a dollar and touched a high and a low of 64.26 and 64.37, respectively.

"The latest inflation data have undoubtedly helped the case of officials arguing for waiting more than three months for the next move", said Jim O'Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York.

The Fed said it expects USA inflation to be at 1.7 percent by the end of this year, down from the 1.9 percent previously forecast.

The Fed's preferred measure of underlying inflation has retreated to 1.5 percent, from 1.8 percent earlier this year, and has run below the central bank's 2 percent target for more than five years.

"I would think that at some point the market is going to be pricing in even greater risks that the Fed might be moving too quickly", said Mark Cabana, head of USA short rates strategy at Bank of America Merrill Lynch in NY.

This report left investors more bullish on the Australian Dollar overall, especially as the Reserve Bank of Australia (RBA) had put focus on the job market earlier in the year. The Australian Dollar to Euro exchange rate traded at around 0.6800. Chairwoman Janet Yellen said. on Wednesday during an afternoon news conference, after the Fed raised rates for the fourth time since the end of 2015, that the Fed is "monitoring" stubbornly low inflation but isn't ready to veer from its tightening schedule, deeming recent week data as "one-off". Crude traded near a seven-month low.

The US central bank lifted the benchmark lending rate by a quarter percentage point and announced it would begin cutting its huge holdings of bonds and securities this year. Stocks on Wall Streets hit a record high overnight.

USD/JPY rallied 0.99% to 110.68, while USD/CHF gained 0.47% to 0.9756. Similarly, the year-on-year change rose to 1.5% with the previous figure upgraded from 1.1% to 1.4%. Retail inflation, as measured by the consumer price index (CPI) slowed to 2.18% in May from 2.99% a month ago as food prices fell from their year-ago level.

Excluding automobiles, gasoline, building materials and food services, retail sales were unchanged last month after an upwardly revised 0.6 percent rise in April. However, she added that policymakers will be watching low inflation numbers closely after some disappointing readings.

"What investors want to know most is the pace of rate hikes going forward", said Ayako Sera, senior market economist at Sumitomo Mitsui Trust in Tokyo. The Atlanta Fed is forecasting GDP rising at a 3.2 percent annualized rate in the second quarter.



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