Stocks on Wall Street were stronger in the run-up to the Federal Reserve’s final policy review of the year, which is expected to deliver another quarter-point cut to the key interest rate.
All three major indices in the US were up in early afternoon trading in New York with investors expecting the Fed to lower the fed funds rate to a range of 4.25%-to-4.5% and watching for the central bank’s projections for the rate track through 2025.
“The Fed is widely expected to cut rates by 25 basis points, and this outcome is largely discounted by market pricing,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “Updated projections are likely to show less easing for 2025, compared with September, and open the way for a pause in the cutting cycle, dependent on the incoming economic data.”
The kiwi dollar fell to a new two-year low, sinking to 57.20 US cents at 7am in Auckland from 57.37 cents at 5pm yesterday, ahead of local gross domestic product figures, which are expected to show a deeper contraction in the September quarter. Yesterday’s New Zealand balance of payments showed a narrowing of the current accounting deficit.
The local currency sank near a nine-year low against the pound, trading at 45.21 British pence from 45.21 pence, ahead of the Bank of England’s rate review, which is expected to keep its current bank rate at 4.75%, half a percentage point higher than New Zealand’s 4.25% official cash rate.
Monetary authorities in Thailand and Indonesia kept their key rates unchanged.
Stocks in Europe were mixed, with France’s benchmark CAC 40 up 0.3% with automaker Renault among gainers after the company – which is Nissan’s biggest shareholder – said it would open to a merger of Japan’s Nissan and Honda.
Locally, the latest ANZ survey on business confidence is also scheduled for release today, while annual meetings include Napier Port and ANZ.
Reporting by Paul McBeth. Image from Chris Briggs on Unsplash.
