The central bank is widely expected to signal that it will start tapering its asset-buying program later this year
Following failed recovery attempts, Wall Street stocks finished mixed overnight as investors remained nervous ahead of the outcome of the Federal Reserve meeting due later today. The central bank is widely expected to signal that it will start tapering its asset-buying program later this year. As such, the S&P 500 and the Dow Jones fell 0.08% and 0.15%, respectively, while the Nasdaq Composite gained 0.22%.
Asian equities were mixed on Wednesday, with markets in South Korea and Hong Kong being closed for holidays. Japan’s Nikkei 225 finished 0.67% lower after the Bank of Japan kept its ultra-supportive monetary policy unchanged, as expected. Investors are also keeping an eye on Chinese developer Evergrande, which is struggling to meet debt payments. The Shanghai Composite index gained 0.40%, while Australia’s S&P/ASX 200 gained 0.32%.
In Europe, stocks opened higher, with the pan-European Stoxx 600 index gaining 0.8% in early trade. Despite the dynamics has improved somehow, market players remain cautious ahead of the outcome of the latest meeting of the U.S. Federal Reserve. Economic and interest rate forecasts will be in focus as well. On the positive side, Evergrande unit Hengda announced it will make a coupon payment on its domestic bonds. The announcement helped ease concerns somehow.
In currencies, the dollar is steady ahead of the key event of the week. The USD index has settled within a tight range in the 93.20 region. Tapering speculations keep the upbeat tone surrounding the greenback these days.In currencies, the dollar is steady ahead of the key event of the week. The USD index has settled within a tight range in the 93.20 region. Tapering speculations keep the upbeat tone surrounding the greenback these days.
Against this backdrop, EURUSD struggles for direction after deriving support from the 1.1700 figure at the beginning of the week. Should the Fed express a hawkish tone and raise its economic forecasts, the dollar would rally across the board later today. In this scenario, the euro may get back under the mentioned level for the first time in a month.
