Dollar drops before Fed, after Alabama poll

The US dollar dropped on December 13, 2017, awaiting the outcome of a Federal Reserve policy meeting and after a shock Democrat election win in Alabama, a staunchly Republican senate district. — AFP file picThe dropped on December 13, 2017, awaiting the outcome of a Federal Reserve policy meeting and after a shock Democrat election win in Alabama, a staunchly Republican senate district. — AFP file picLONDON, Dec 13 — The dollar dropped today awaiting the outcome of a Federal Reserve policy meeting and after a shock Democrat election win in a staunchly Republican senate district fuelled fears about US President Donald Trump’s tax cut plans.

European stock markets were mostly lower after Tokyo posted losses, as investors also looked ahead to policy announcements due tomorrow from both the European and the Bank of England.

showed slight early gains a day after both the Dow and S&P 500 indices clocked up record highs.

The Fed is expected to announce a rate increase later today. But traders said the crucial event will be the statement from outgoing chair Janet Yellen, which Fed watchers will be dissecting for signals about more rate rises next year.



are higher in early action, with the markets eyeing today’s Fed monetary policy decision, as well as the ongoing tax reform reconciliation process and the Alabama Senate election result,” analysts at the Charles Schwab brokerage said.

Bloomberg News reported Republican senators saying lawmakers in both houses of Congress were making progress in reconciling two tax reform bills and a final draft could be agreed imminently, which could allow it to go to a vote by next Tuesday.

Tax bill doubts

Bets on the market-friendly tax cuts being introduced helped drive a surge in global markets this year, and while have stuttered in recent weeks, analysts suggested more gains could come.

But Doug Jones’s victory over the controversial Roy Moore in the usually deep-red Alabama senate vote cut the Republicans’ majority to 51-49, meaning any wavering could see them fail to push the tax cuts through.

That sent the dollar falling today against the euro, yen and sterling.

“We could be in for a brush of bad news for the dollar with the latest Alabama election results shifting to Democrat Doug Jones,” said Stephen Innes, head of Asia- trading at OANDA.

Bitcoin retreats



Elsewhere today, bitcoin dropped to well below US$16,000 from US$17,247.64 late in New York yesterday, according to Bloomberg, following this month’s stratospheric rise to multiple records.

However, while there are warnings of a massive bubble bursting, some analysts say the digital unit could continue to rally, having already increased 20-fold this year.

“Bitcoin has fixed supply and growing demand,” noted Greg McKenna, market strategist at AxiTrader.

“Think of it less as a currency and more as a stock which has a fixed supply of shares on issue and increasing demand. What happens then? Prices rise.”

The unit debuted on a major exchange at the weekend, with futures contracts on the unit appearing on the Chicago Board Options Exchange, while it is also expected to list on the rival Chicago Mercantile Exchange next week.

Oil prices meanwhile jumped before US weekly energy inventory data due today.

Key figures around 1435 GMT

London – FTSE 100: FLAT at 7,502.29 points



Paris – CAC 40: DOWN 0.4 per cent at 5,405.91

Frankfurt – DAX 30: DOWN 0.2 per cent at 13,155.24

EURO STOXX 50: DOWN 0.3 per cent at 3,588.31

New York – DOW: UP 0.2 per cent at 24,541.26

Tokyo – Nikkei 225: DOWN 0.5 per cent at 22,758.07 (close)

Hong Kong – Hang Seng: UP 1.5 per cent at 29,222.10 (close)

Shanghai – Composite: UP 0.7 per cent at 3,303.04 (close)

Euro/dollar: UP at US$1.1761 from US$1.1742 at 2200 GMT



Pound/dollar: UP at US$1.3358 from US$1.3316

Dollar/yen: DOWN at 113.01 yen from 113.56 yen

Oil – North Sea: UP 2 cents at US$63.37 per barrel

Oil – West Texas Intermediate: UP 25 cents at US$57.39

— AFP

Source: The Malay Mail Online





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