Fed holds off on September rate hike, announces plans for debt sell-off

Gold Price Inches Up Ahead of Fed Meeting

Gold Price Inches Up Ahead of Fed Meeting

Wholesale gasoline was little changed at $1.66 a gallon.

Equities had rallied Monday as investors turned their attention to macro issues, particularly a Federal Reserve policy meeting and Trump's maiden speech to the UN General Assembly.

In a statement following the Federal Open Market Committee's two-day meeting, central bankers pointed to signs of strength in the USA economy, including a pickup in household spending and growth in business investments. The CAC 40 in France was 0.5 percent firmer at 5,270. The FTSE 100 index of leading British shares was stable at 7,272.

After concluding a closely watched two-day policy meeting on Wednesday, the Fed left interest rates unchanged as expected but signalled it still expects one more increase by the end of the year, despite a recent bout of low inflation. The move will gradually increase long-term borrowing rates.

So far this month, the 2-year Treasury yield has climbed more than 10 basis points, the benchmark 10-year note yield has tacked on more than 12 basis points, while the yield on the 30-year bond has advanced about 6 basis points, thus far in September.

USA stocks had little reaction to news from the Fed, which still expects a third rate rise this year and three more in 2018.

"Before the Fed announced its decision, there were high expectations that monetary policymakers would drag interest rate expectations lower for 2017", said Hussein Sayed, chief market strategist at FXTM. The selling was driven by the U.S. Federal Reserve which sounded more hawkish than expected in its monetary policy statement.

Year-on-year, New Zealand's economy grew in the last quarter, as expected.

Kathleen Brooks, research director at City Index in London, said that if data continued to point to strong jobs growth and a low unemployment rate, a December Fed rate rise was likely, boosting prospects for the dollar. That means the OECD is expecting eurozone growth this year to match the US rate, which it left unchanged.

In the Asian trading, the NZ dollar fell to 81.40 against the yen and 1.0978 against the Australian dollar, from an early more than a 6-week high of 81.86 and a 4-week high of 1.0921, respectively.

Japan's Nikkei 225 rose 0.71%. Hong Kong's Hang Seng index added 0.4 percent to 28,127.80.

The Dow Jones Industrial Average .DJI rose 41.79 points, or 0.19 percent to end at 22,412.59, its seventh straight record close.

Brent crude futures rose $1.15, or 2.1 percent, to settle at $56.29 a barrel, while USA crude futures gained 93 cents, or 1.9 percent, to settle at $50.41.

The dollar rose to 112.38 yen from 111.50 yen on Tuesday.

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