Latest news with #USFederalOpenMarketCommittee
Mint
4 days ago
- Business
- Mint
US Fed meeting: Rate cuts unlikely; can Powell's hawkish tone upset trend reversal buzz in Indian stock market?
US Fed meeting: Amid the raging war between Israel and Iran, investors are eyeing a key event — the outcome of the US Federal Open Market Committee (FOMC) meeting later on June 18. Markets have largely priced in a status quo on interest rates from the Fed, even as inflation has cooled and the economy is showing signs of weakness. There is also pressure from President Trump to lower rates. However, a rate cut is unlikely at this juncture due to prevailing uncertainty over how US tariffs will impact the growth-inflation dynamics in the world's largest economy. The US headline consumer price index (CPI) for May increased at a softer-than-expected pace of 0.1 per cent month-on-month and was 2.4 per cent year-on-year. Core CPI increased 0.1 per cent month-on-month and 2.8 per cent year-on-year. The Fed is expected to stay in "wait-and-watch" mode because there is heightened uncertainty on what direction inflation will take in the coming months. So far, Trump's tariffs have not led to any significant rise in US inflation. However, some experts suggest it is too early to assess their full impact. They expect more visible signs of rising inflation in the second half of the year, once the US concludes negotiations and the tariffs take effect in their final form. According to Madhavi Arora, Lead Economist at Emkay Global Financial Services, the market continues to price in two Fed cuts in 2025, but the probability of a cut in June is zero. The next cut is expected in October. "While the CPI print is somewhat reassuring, there remains very little signal in the data, with firms continuing to manage tariffs for now – tariffs will likely only show up in the data (either through higher inflation or lower profit margins) a few months down the line. In such a scenario, the Fed will remain in wait-and-watch mode," said Arora. More than the Fed's policy decision, investors are focused on the Fed's "dot plot" and Chair Jerome Powell's comments on the evolving trends of economic growth and inflation. Experts believe Powell's hawkish tone may weigh on the domestic market, which is trying to shrug off geopolitical headwinds. Market participants are clinging to hopes that the Fed will ultimately cut rates this time and that the Israel-Iran war will not drag on for long. "The market has priced in that the Fed will not cut rates this time. A rate cut is expected later in the year. Powell's hawkish comments may have some short-term impact, and there could be some foreign capital outflow due to a strengthening dollar. However, a prolonged downtrend is unlikely," said G Chokkalingam, the founder and head of research at Equinomics Research Private Limited. The domestic market's macro fundamentals are well-placed and suggest it could see healthy gains in the medium to long term. The Indian economy is expected to grow at a rate of over 6 per cent in FY26. The monsoon is expected to remain above normal this year, and earnings are also projected to improve further from Q1FY26. A major risk is crude oil prices. If oil rises to around $100 per barrel, it could distort India's fiscal math and raise inflationary pressures, potentially triggering a sharp correction in the domestic market. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.
Malaysian Reserve
6 days ago
- Business
- Malaysian Reserve
Ringgit rises against US dollar amid heightened uncertainties
KUALA LUMPUR — The ringgit ended higher against the US dollar, supported by a weaker US Dollar Index (DXY) which fell by 0.21 per cent to 97.979 points amid heightened uncertainties, an economist said. At 6 pm, the local note appreciated to 4.2370/2450 against the greenback from Friday's close of 4.2435/2480. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ongoing military conflict between Israel and Iran continues to dominate market attention at a time when investors are bracing for the upcoming US Federal Open Market Committee (FOMC) meeting, scheduled for June 17–18. 'Euro, British pound and Swedish krona were gaining against the greenback, while emerging market currencies were mixed with dollar-ringgit oscillating within a tight range. 'The USD/MYR started off in the morning session at RM4.2513 but later in the day appreciated towards RM4.2450,' he told Bernama. He noted Brent crude oil is currently hovering around US$73.84 per barrel suggesting that the crude oil market is fairly calm today compared to last Friday where it hit around US$77 in the intraday session. 'Expect market sentiments to be guarded as they observe how the military conflict would evolve,' he said, adding that the downside risks to growth are clearly visible. Mohd Afzanizam said that this week's FOMC meeting will be critical as to how the US Federal Reserve would navigate such challenges along with weak fiscal position by the US government and disruptive trade policies adopted by the current administration. At the closing, the ringgit traded higher against a basket of major currencies. It rose versus the Japanese yen to 2.9397/9455 from 2.9448/9482 at Friday's close, but weakened against the British pound to 5.7555/7664 from 5.7482/7543 and decreased vis-à-vis the euro to 4.9077/9170 from 4.8906/8958 previously. The ringgit was mixed versus its ASEAN counterparts. It improved versus the Thai baht to 13.0389/0696 from 13.0807/1018 at Friday's close and gained against the Philippine peso to 7.51/7.53 from 7.55/7.56. However, it fell against the Singapore dollar to 3.3102/3167 from 3.3077/3118 and edged down vis-a-vis the Indonesian rupiah to 260.4/261.1 from 260.2/260.6 previously. — BERNAMA
New Straits Times
6 days ago
- Business
- New Straits Times
Ringgit rises against US dollar amid heightened uncertainties
KUALA LUMPUR: The ringgit ended higher against the US dollar, supported by a weaker US Dollar Index (DXY) which fell by 0.21 per cent to 97.979 points amid heightened uncertainties, an economist said. At 6pm, the local note appreciated to 4.2370/2450 against the greenback from Friday's close of 4.2435/2480. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ongoing military conflict between Israel and Iran continues to dominate market attention at a time when investors are bracing for the upcoming US Federal Open Market Committee (FOMC) meeting, scheduled for June 17–18. "Euro, British pound and Swedish krona were gaining against the greenback, while emerging market currencies were mixed with dollar-ringgit oscillating within a tight range. "The USD/MYR started off in the morning session at RM4.2513 but later in the day appreciated towards RM4.2450," he told Bernama. He noted Brent crude oil is currently hovering around US$73.84 per barrel suggesting that the crude oil market is fairly calm today compared to last Friday where it hit around US$77 in the intraday session. "Expect market sentiments to be guarded as they observe how the military conflict would evolve," he said, adding that the downside risks to growth are clearly visible. Mohd Afzanizam said that this week's FOMC meeting will be critical as to how the US Federal Reserve would navigate such challenges along with weak fiscal position by the US government and disruptive trade policies adopted by the current administration. At the closing, the ringgit traded higher against a basket of major currencies. It rose versus the Japanese yen to 2.9397/9455 from 2.9448/9482 at Friday's close, but weakened against the British pound to 5.7555/7664 from 5.7482/7543 and decreased vis-à-vis the euro to 4.9077/9170 from 4.8906/8958 previously. The ringgit was mixed versus its Asean counterparts. It improved versus the Thai baht to 13.0389/0696 from 13.0807/1018 at Friday's close and gained against the Philippine peso to 7.51/7.53 from 7.55/7.56. However, it fell against the Singapore dollar to 3.3102/3167 from 3.3077/3118 and edged down vis-a-vis the Indonesian rupiah to 260.4/261.1 from 260.2/260.6 previously.
Business Recorder
6 days ago
- Business
- Business Recorder
Australia, New Zealand dollars vulnerable as Israel-Iran conflict escalates
SYDNEY: The Australian and New Zealand dollars remained vulnerable to declines on Monday as the conflict between Israel and Iran showed no sign of cooling and oil prices climbed anew, although the sell-off in global stocks did steady a little. The Aussie dropped 0.3% to $0.6470, having fallen 0.7% on Friday to as low as $0.6457. It has support at the 200-day moving average of $0.6429, while resistance is stiff at $0.6550. The kiwi dollar was flat at $0.6008, after diving 0.9% on Friday to as low as $0.5996. Australia, New Zealand dollars tumble as Israel's strike on Iran hammers global risk It has support at 60 cents. On Monday, Wall Street futures climbed slightly while currency markets were mostly calm as investors assessed the latest developments in the Middle East. Iranian missiles struck Israel's Tel Aviv and the port city of Haifa on Monday, destroying homes and fuelling concerns that it could lead to a broader regional conflict. 'The main influence on AUD/USD (this week) is likely to be the conflict in the Middle East and the FOMC meeting,' said Joseph Capurso, head of international economics at the Commonwealth Bank of Australia, referring to the US Federal Open Market Committee meeting starting on Tuesday. 'AUD/USD could fall nearer support at 0.6307 if the conflict escalates significantly.' Strategists from Deutsche Bank noted that the performance of the Australian dollar has a negative correlation with oil prices, even though Australia has become an energy exporter over recent years. Australia will publish monthly jobs figures on Thursday where expectations are for a gain of 25,000 jobs in May and a steady jobless rate of 4.1%. The labour market has been surprisingly resilient and another strong print could challenge market pricing for a rate cut next month, which is now priced at 75%. New Zealand will release its first-quarter gross domestic product figures on Thursday where forecasts are for a solid quarterly growth rate of 0.7% as the economy emerged from a policy-induced downturn. 'Our 0.7% growth forecast is an upgrade from our previous estimate of 0.4%… The signs of strength in the sectoral data were something of a surprise for us,' said Michael Gordon, senior economist at Westpac. Swaps imply there might be just one rate cut left in the current easing cycle from the Reserve Bank of New Zealand, which is more than fully priced in by November.
New Straits Times
6 days ago
- Business
- New Straits Times
Australia, New Zealand dollars vulnerable as Israel-Iran conflict escalates
SYDNEY: The Australian and New Zealand dollars remained vulnerable to declines on Monday as the conflict between Israel and Iran showed no sign of cooling and oil prices climbed anew, although the sell-off in global stocks did steady slightly. The Aussie dropped 0.3 per cent to US$0.6470, having fallen 0.7 per cent on Friday to as low as US$0.6457. It has support at the 200-day moving average of US$0.6429, while resistance is stiff at US$0.6550. The New Zealand dollar was flat at US$0.6008, after diving 0.9 per cent on Friday to as low as US$0.5996. It has support at 60 US cents. On Monday, Wall Street futures climbed slightly while currency markets were mostly calm as investors assessed the latest developments in the Middle East. Iranian missiles struck Israel's Tel Aviv and the port city of Haifa on Monday, destroying homes and fuelling concerns that the situation could escalate into a broader regional conflict. "The main influence on AUD/USD this week is likely to be the conflict in the Middle East and the FOMC meeting," said Joseph Capurso, head of international economics at the Commonwealth Bank of Australia, referring to the US Federal Open Market Committee meeting starting on Tuesday. "AUD/USD could fall nearer support at 0.6307 if the conflict escalates significantly." Strategists from Deutsche Bank noted that the performance of the Australian dollar has a negative correlation with oil prices, even though Australia has become an energy exporter in recent years. Australia will publish monthly jobs figures on Thursday, where expectations are for a gain of 25,000 jobs in May and a steady jobless rate of 4.1 per cent. The labour market has been surprisingly resilient, and another strong print could challenge market pricing for a rate cut next month, which is now priced at 75 per cent. New Zealand will release its first-quarter gross domestic product figures on Thursday, where forecasts are for a solid quarterly growth rate of 0.7 per cent as the economy emerges from a policy-induced downturn. "Our 0.7 per cent growth forecast is an upgrade from our previous estimate of 0.4 per cent... The signs of strength in the sectoral data were something of a surprise for us," said Michael Gordon, senior economist at Westpac. Swaps imply there might be just one rate cut left in the current easing cycle from the Reserve Bank of New Zealand, which is more than fully priced in by November.
