Dollar touches eight-week high against yen as Fed meets

Dollar touches eight-week high against yen as Fed meets

Treasurys pulled back Monday, pushing yields higher, as traders shed government paper ahead of a meeting of Federal Reserve policy makers that's expected to begin the process of winding down the central bank's balance sheet. However the USA central bank could give indications on when it plans to begin unwinding its balance sheet, as well as on any future interest rate decisions.

LONDON, Sept 19 (Reuters) - The dollar hit an eight-week high against the yen on Tuesday as US central bank policymakers meet to discuss further monetary tightening, with renewed calm over North Korea easing demand for perceived safe havens.

China's Shanghai Composite index rose 9.24 points or 0.28% to 3,362.86 after the release of stronger-than-expected bank loan data for August. Surveys of economists show they do not expect the Fed to raise interest rates at this time.

Economist Scott Anderson said that this will be the biggest meeting of the year, as he believes that Fed Chair Janet Yellen's quarterly press conference would be laying the foundation for prospects of a possible interest hike for the said month, as well as details regarding next year's outlook.

The members are also likely to keep its key benchmark interest rate steady, as investors see that inflationary pressures are not enough to push the bank for another hike in December.

However, Japanese yen was down 0.33% and Taiwan dollar 0.06%.

ANALYST'S TAKE: "On the political front, no prizes for guessing that North Korea will top the agenda of President Trump's address to the gathering of world leaders at the U.N.", Rob Carnell of ING said in a report.

Singapore stocks jumped on Monday, tracking gains in Asia following a record-breaking Wall Street session, as investors shrugged off the latest North Korean missile test and hoped for a peaceful resolution.

The U.S. 10-year yield had dropped to the 10-month trough near 2.00 percent on September 8 on widespread risk aversion but has bounced back since.

Prime Minister Shinzo Abe is considering calling a poll for as early as next month to take advantage of his improved approval ratings and disarray in the main opposition party, according to government and ruling party sources.

S&P 500 e-minis ESc2 were up 8 points, or 0.32 percent, with 48 contracts changing hands. The precious metal was off 0.4 percent at $1,314.43 an ounce.

The Canadian dollar was on the defensive after Bank of Canada Deputy Governor Timothy Lane said on Monday that the currency's strength will be a factor in future rate decisions. Brent crude, used to price worldwide oils, dropped 37 cents to $55.25 in London.



Other news