Dollar reaped gains as investors wait for the long-anticipated interest rate decision by the Fed, which opened its meeting yesterday and is due to announce results later today, followed by a press conference for Janet Yellen, the bank chief, to explain the reasons behind the decision, and even more importantly, the pace of the next hikes, if there was to be a hike today as is mostly believed. Dollar's index, which measures the greenback's performance against a basket of major currencies, rose 0.60% yesterday, it last traded at 98.20. Dollar traded at 1.0935 against the euro, moving farther away from a 6-week trough at 1.1053. It added a further 0.16% against the yen, to 121.90, far from another 6-week low at 120.36. Dollar traded at 1.5046 against sterling, near a week-high struck overnight.
Wall Street closed with impressive gains, as investors take the expected rate hike as a vote of confidence on the economy. Dow Jones rose 156 points, or 0.90% to 17,524. NASDAQ gained 43 points, or 0.87% to 4,995. S&P 500 jumped 21 points, or 1.06%, making it the biggest riser, at 2,043.
Asian shares took heart from these gains, with Japan's Nikkei index surging by 2.50% to 19,029, far away from a 7-week low reached yesterday. China's CSI300 for the biggest listed companies in Shanghai and Shenzhen rose 0.43%. Australia's S&P\ASX 200 index jumped 2.22%. Korea's KOSPI grabbed 1.96%, while India's Nifty profited by 0.73%.
U.S. crude futures gave up some ground after two days of gains, sliding 24 cents, or 0.66% to $37.11 a barrel, and inching closer to their 7-year low of $34.53. Brent futures were more muted, trading flat at $38.59 per barrel.
Gold prices fell yesterday as investors abandoned it in favor of interest-giving assets ahead of the Fed's decision, but then edged up in today's morning, with the precious metal's futures rising $2.10, or 0.20% to $1,063.70 an ounce. Silver futures tagged along, gaining four cents, or 0.30% to $13.81 an ounce.
A slew of economic data is awaited today; from Europe, German and French Flash Manufacturing PMIs are forecast at 53.0, 50.9 for December respectively, with Germany's economy asserting itself as the engine of the Eurozone. The wider Manufacturing PMI for the whole zone is forecast at 52.8. Higher numbers for all these surveys would be positive for the euro.
From the U.S., Building Permits for December are forecast at 1.155M, marginally better than October's 1.150M and good news for the dollar, which is expected to remain buoyed at any case due to the Fed's expected rate hike.