US recap: EUR/USD gains post-Fed, but yen losses bolster dollar
Sept 19 (Reuters) -The yen fell against the dollar and other G-10 peers as the risk tone improved following Wednesday’s Fed Reserve rate cut and a series of central bank policy meetings Thursday.
The pound rose in high turnover after the Bank of England left its policy rate at 5.0%, as expected, saying it would be careful about future cuts. The central bank also held off from running down its bond holdings at a faster pace.
BoE Governor Andrew Bailey said he was optimistic rates would fall though needed evidence inflation was cooling.
The Norwegian krone rallied about 1% after the central bank left its policy rate at 4.5%, a level Norges Bank Governor Ida said it would likely remain at for the rest of year.
Elsewhere, the Turkish central bank left its policy rate steady while South Africa’s central bank eased 25 basis points.
Upbeat U.S. data further buoyed investor sentiment including an unexpected drop in weekly jobless claims and positive Philadelphia Fed index.
Bank of Canada deputy governor Nicolas Vincent said a consensus policy decision does not mean council members all share the same view on the path for rates.
The Bank of Japan is expected to leave its policy unchanged Friday, the same day the latest Japan CPI reading is due.
China is expected to trim its main policy and benchmark lending rates on Friday.
Treasury yields rose 1-7 basis points as the curve steepened, the 2s-10s curve was up nearly 5 basis points to +13.5bp.
The S&P 500 rallied 2.01%, posting a new intraday record, while Nasdaq Composite rose 2.85%.
WTI surged 1.75% amid demand expectations after the Fed’s jumbo rate cut Wednesday.
Gold gained 1.20% on rising inflation expectations and as Middle East tensions persist.
Copper jumped 1.29%, helped by the improving risk tone.
Heading toward the close: EUR/USD +0.36%, USD/JPY +0.51%, GBP/USD +0.50%, AUD/USD +0.88%, EUR/JPY +0.81%, GBP/JPY +1.05%, AUD/JPY +1.51%.
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Editing by Burton Frierson
Robert Fullem is a Reuters market analyst. The views expressed are his own.
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