Dollar and stocks rise after Fed rate cut

The dollar rebounded, long-term bond yields increased, and Asian stocks rose following the U.S. Federal Reserve's announcement of a 50-basis-point rate cut, signaling a cautious approach to further easing.

The S&P 500 hit a record high overnight and although it closed slightly lower, futures rose 0.67% in the Asia day. Nasdaq futures were up 1%. Japan's Nikkei jumped 2.5% and stock markets in Australia and Indonesia hit record highs, News.Az reports, citing Reuters.

The Fed lowered its window for the benchmark policy rate by 50 basis points to 4.75-5%, where traders had been leaning before the decision. The dollar immediately hit a two-and-a-half-year low on sterling, but then recoiled sharply.

It was up nearly 1% to 143.55 yen early on Thursday and well off lows on the euro at $1.1097.

Ten-year Treasury yields have climbed nearly eight basis points from a day earlier to 3.719%, while gold shot to a record high just shy of $2,600 an ounce, before easing back to steady at $2,559.

The Fed's cut is expected to support spending and the U.S. economy, and encourage other central banks to cut rates.

MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.3%. Hong Kong and China logged broad gains on the view that Beijing is more likely to roll out stimulus now that the Fed has moved.
Chinese bond yields fell.

South Korean markets returned from holidays with a thud after a downbeat Morgan Stanley note, which halved SK Hynix's target price, prompted selling in chip stocks. SK Hynix shares tumbled 8.7% and Samsung fell 3.1%.

News.Az