Published: Sun, March 19, 2017
World | By Carl Welch

Asia stocks set to end week higher, dollar slides after Fed

Asia stocks set to end week higher, dollar slides after Fed

On Wednesday, the loonie rallied the most in a year as the Fed raised interest rates as expected but central bank officials stuck to their outlook for two more rate hikes this year and three in 2018, a more gradual path than some investors had expected.

EUROPEAN OPTIMISM: Stock markets across the Atlantic rose, with the French CAC 40 up 0.6% and Germany's DAX up 0.5%.

MSCI's broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS rose 0.1 percent, set to end the week with a 3.3 percent gain, its biggest weekly increase since September.

The Standard & Poor's 500 index slipped 3.88 points, or 0.2 percent, to 2,381.38.

Meantime, spot gold was was up 0.3% at $1,230.28 U.S.an ounce early Friday, taking its gains this week to 2%.

A widely anticipated US interest rate hike combined with a dovish outlook for the future path of rates lifted emerging stocks to 20-month highs on Thursday but also prompted a number of developing central banks to tighten monetary policy.

"They are going to be very measured", said Nick Maroutsos, portfolio manager at Janus Capital Group, who believes it is too early to take a view on European interest rates. The yield on the 10-year Treasury rose to 2.52% from 2.50% late Wednesday.

The Dow Jones Industrial Average rose 96.65 points, or 0.46 percent, to 20,934.02, the S&P 500 gained 16.79 points, or 0.71 percent, to 2,382.24 and the Nasdaq Composite added 35.65 points, or 0.61 percent, to 5,892.47.

In Europe, millions of Dutch voters go to the polls Wednesday in an election overshadowed by a blazing diplomatic row with Turkey, with all eyes on the fate of far-right MP Geert Wilders. After the United Kingdom vote last summer to leave the European Union, investors were anxious about whether a wave of nationalism across the continent could eventually break the European union apart.

"If the Fed doesn't deliver the rate rise, it sure will shock the markets and cause the dollar to collapse", said Fawad Razaqzada at Forex.com.

Indonesia's central bank, also scheduled to release its latest decision on Thursday, is expected to keep its benchmark interest rate unchanged in a bid to spur economic growth. The Bank of England held its interest rates at record lows.

The greenback had weakened broadly after the Fed's policy statement was seen as less hawkish than expected by sticking to projections of three total rate hikes in 2017 and not four as some traders had hoped for. US light crude settled 11 cents lower at $48.75 a barrel. "That is a bit of a vacuum that gold can rally into". "While the dollar sell off may last for a day or two our thinking is that buying these. dips is still a good strategy".

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