Federal Reserve raises rates, signals two more to come

ECB calls halt to quantitative easing, despite 'soft' euro

CURRENCIES: The dollar rose to 110.68 Japanese yen from 110.65 yen while the euro was flat at $1.1568.

The concerns are that there's still an unsure economic outlook, which could be complicated by a developing trade war with the United States.

The euro's 5 percent fall against the dollar since April is also helping the European Central Bank as the weaker currency is increasing the cost of imports and boosting inflation.

The outlook for the Euro US Dollar (EUR/USD) exchange rate is now rather mixed, with the imminent rate decision liable to make or break demand depending on the revealed sentiment of the central bank.

The Asia Pacific MSCI index edged down 0.2 per cent, with most regional markets shrugging off a strong close on Wall Street.

The US dollar rose against a basket of major currencies by more than a penny as the euro cratered, and US stocks ticked up in afternoon trading on Thursday, as the European Central Bank signaled interest rate hikes were a long way off.

The Euro initially weakened after the central bank said it would extend the bond purchase program, but spiked lower shortly after the start of ECB President Mario Draghi's press conference.

The ECB appeared to balance the phase-out of the stimulus programme with the pledge that the withdrawal of support for the economy would be gradual, and that interest rates could stay low for longer than the second quarter of next year if needed. Short term rate forecasts were shifted marginally higher, with the median dot for this year indicating two more rate increases were on the cards, suggesting that the central bank is on course to hike again in September and then again in December.

"It remains part of the toolbox", he said.

US President Donald Trump has made a decision to impose "pretty significant" tariffs and was set to announce a list targeting US$50 billion (S$67 billion) of Chinese goods yesterday.

The Dow Jones Industrial Average fell 7.94 points, or 0.03 percent, to 25,193.26, the S&P 500 gained 7.6 points, or 0.27 percent, to 2,783.23 and the Nasdaq Composite added 62.69 points, or 0.81 percent, to 7,758.39.

Canada is also contending with new USA tariffs on steel and aluminium imports as well as slow-moving talks to modernise the North American Free Trade Agreement.

The bank's bond-buying stimulus programme, also known as "quantitative easing" (QE) is credited with having helped the eurozone economy to recover from the region's financial crisis.

Its U.S. counterpart, the Federal Reserve, has already halted bond purchases and has increased interest rates seven times since late 2015.

Oil prices were little changed as investors eyed a key Organisation of Petroleum Exporting Countries meeting in Vienna.

OIL: Benchmark U.S. crude lost 20 cents to $66.69 per barrel in electronic trading on the New York Mercantile Exchange.

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