Fed Holds Rates Steady, Notes Strongly Rising Business Investment

Fed Holds Rates Steady, Notes Strongly Rising Business Investment

In a statement after the end of the two-day policy meeting, the central bank said, "The stance of monetary policy remains accommodative, thereby supporting strong labour market conditions and a sustained return to 2 per cent inflation". The trade-weighted index fell to 73.12 from 73.25. The kiwi traded at 58.50 euro cents from 58.42 cents.

The Fed signalled it is more confident that US inflation will remain around the central bank's 2% target range after undershooting that level for much of the last six years.The US central bank said in the statement that price growth has moved close to its target and is likely to stay there in the medium term.

The dollar's strength stems from the pickup in inflation and growing expectations that the Fed will hike rates four times this year.

The kiwi dollar traded at 69.88 U.S. cents as at 8am in Wellington and earlier touched 69.81 cents, the lowest since late December, from 70.12 cents late yesterday.

E-Mini futures for the S&P 500 crept 0.3 per cent higher, with overnight results from Kraft Heinz, Tesla and Spotify in focus.

In late NY trading, the euro rose to 1.2005 dollars from 1.1996 dollars in the previous session, and the British pound increased to 1.3624 dollars from 1.3618 USA dollars in the previous session.

"There wasn't any particular news to get it going other than the Fed staying the course, and that contributed to the slide in stock prices", said Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth LLC in NY.

In economic data, USA private sector employers are said to have added 204,000 workers to payrolls last month, according to the ADP Research Institute.

Windy, warm Tuesday in Oklahoma, severe weather possible
Tonight: Partly cloudy - low around 65 with south wind 10 to 14 miles per hour gusting as high as 24 miles per hour . Sunday also will be mostly sunny but slightly cooler with a high temperature expected to be around 67 degrees.

The MSCI Emerging Market Index decreased 0.7 per cent to the lowest in more than a week.

"The labor market has continued to strengthen and. economic activity has been rising at a moderate rate", the central bank wrote in a statement on Wednesday.

Last night the Fed acknowledged rising inflation, which...

The release of the Fed statement overshadowed the release of a report from payroll processor ADP showing private sector employment increased by slightly more than anticipated in the month of April.

The Fed statement was not quite as hawkish as some had wagered on and caused a dip in the dollar, though sentiment remained bullish given US rates were still clearly heading higher while those in Europe and Japan lagged far behind.

The dollar eased 0.1 percent to 109.68 yen JPY=, inching away from a three-month peak of 110.05 yen set on Wednesday.

Stock markets and bond yields were largely unmoved by the decision.

Spot gold was up 0.4 per cent at $1,310.48 an ounce.

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