Share

Dollar on back foot despite Fed signal on rate hikes

London - The dollar stumbled on Thursday despite mounting expectations that the Federal Reserve will speed up interest rate hikes this year, dealers said.

After Janet Yellen's final meeting as Fed governor, the US central bank's policy board said on Wednesday that while the nation's inflation remains below target, it expects it to move up this year.

The Fed's comments provided a partial boost for the dollar, although it stumbled during European trading hours.

"The dollar did not get the lift we expected from the Fed monetary policy meeting yesterday," said ADS Securities analyst Konstantinos Anthis on Thursday.

"Even though the central bank made it clear that they see inflation moving higher this year the US currency failed to capitalise on this news."

The greenback is still under pressure against most of its peers as central banks around the world look to tighten monetary policy more in line with the US.

'Unloved'

"It's remarkable how the dollar remains depressed and unloved, despite the Federal Reserve expressing optimism over increased inflationary pressures as the year moves on," said Lukman Otunuga at FXTM online currency trading brokerage.

European stock markets slid after a mixed performance across Asia, with Frankfurt's DAX slumping 1.4 %.

London was hampered by a strong pound, which tends to weigh on the share prices of multinationals that earn in currencies other than sterling.

The pound rose on Thursday against major rivals as dealers shrugged off news of slowing UK manufacturing growth in January.

The FTSE was also dented by telecoms giant Vodafone, which announced a drop in revenue during its third quarter - sending its share price sliding 4.5%.

Royal Dutch Shell dropped 1.7%, despite the energy major announcing that 2017 net profits more than doubled on recovering oil prices.

Wall Street opened lower, with the Dow dropping 0.4% in the first moments of trading.

In Asia, Tokyo's main stocks index jumped almost 2.0% on a weaker yen and bargain-buying following a six-day losing streak.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.04
-0.7%
Rand - Pound
23.98
-0.4%
Rand - Euro
20.53
-0.3%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.7%
Platinum
894.10
-0.3%
Palladium
996.00
-0.6%
Gold
2,194.02
-0.0%
Silver
24.42
-0.9%
Brent Crude
86.09
-0.2%
Top 40
67,905
+0.3%
All Share
74,106
+0.3%
Resource 10
56,200
+1.0%
Industrial 25
103,604
+0.3%
Financial 15
16,488
-0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders