Dol­lar strug­gles as Fed min­utes dampen rate-hike hopes

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

The dol­lar was un­der pres­sure in Asian trad­ing Thurs­day af­ter sur­pris­ingly bear­ish min­utes from the US Fed­eral Re­serve s last meet­ing damp­ened hopes for an im­mi­nent in­ter­est rate hike.

In Tokyo, the dol­lar bought 123.92 yen, slightly up from 123.89 yen in New York, but sharply down from 124.32 yen in Asian trad­ing on Wed­nes­day be­fore the min­utes re­lease.

The euro ticked up to $1.1136 and 137.98 yen, from $1.1121 and 137.78 yen in US trade, win­ning sup­port from news that Euro­pean fi­nance min­is­ters for­mally ap­proved Greece s 86 bil­lion euro bailout. The dol­lar took a hit in New York af­ter US cen­tral bank damp­ened ex­pec­ta­tions for a rate hike that some had thought could come as early as Septem­ber.

While Fed said the time for a hike was "ap­proach­ing," it sin­gled out a slow­down in China s econ­omy as a red flag for US growth. Those con­cerns have been height­ened since the last Fed meet­ing in July, be­fore China un­ex­pect­edly de­val­ued its cur­rency last week in a move seen as de­signed to boost slow­ing ex­ports. "While the Fed is look­ing less likely to move in Septem­ber, ev­ery­body is re­ally wor­ried that China is slow­ing down faster than what of­fi­cial fig­ures are telling you," Evan Lu­cas, at IG Mar­kets in Mel­bourne, told Bloomberg News.

Mean­while, fi­nance min­is­ters in the 19-coun­try eu­ro­zone gave the all-clear af­ter the new bailout was ap­proved by Euro­pean par­lia­ments, in­clud­ing the Bun­destag of Ger­many, Greece s ef­fec­tive pay­mas­ter.

The long- de­bated bailout ac­cord goes far be­yond eco­nomic man­age­ment to in­clude an ex­ten­sive over­haul of Greece s health and so­cial wel­fare sys­tems, plus its busi­ness prac­tices and public ad­min­is­tra­tion.

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