US currency hits two-year high on hawkish forecasts from central bank
The dollar rose to its highest level in more than two years and global stocks fell on Thursday after the US Federal Reserve jolted markets by signalling a slower pace of interest rate cuts next year. Asian currencies including the Chinese renminbi and Japanese yen fell sharply against the dollar, with South Korea’s won sinking to a 15-year low. The region’s benchmark equities indices opened down after a sharp slide in Wall Street stocks the previous day.
“For Asia, which has struggled in terms of relatively lower yields and the weakness in China adding pressure on the region, are the culmination of those factors.” The dollar, which jumped 1 per cent against a basket of currencies including the yen and the pound on Wednesday, rose a further 0.1 per cent on Thursday. The benchmark 10-year Treasury yield rose another 0.03 percentage points to 4.52 per cent. The rate-sensitive two-year yield was flat at 4.35 per cent after rising 0.
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