In currency trading, the dollar index rose 0.47 per cent, with the euro down 0.4 per cent to US$1.2111. — Reuters pic
Stocks in the United States added to losses after the Federal Reserve left its key rate near zero and made no change to its monthly bond purchases, while flagging a potential slowdown in the pace of the economic recovery. “It is early days yet but we might see selling pressure ramp up for fear there could be a stampede for the exit.”
The pan-European STOXX 600 index lost 1.16 per cent after the German government slashed its growth forecast for this year, while talk of further interest rate cuts by the European Central Bank hit banking stocks and the euro. “I would say that the Fed having noted the recent moderation in the pace of the recovery is adding to concerns about the near-term outlook. The risk-off move today has gained traction in the Fed’s more cautious outlook for growth.”In emerging markets, currencies in Russia, Brazil , Mexico, and South Africa all lost over 1 per cent on the day versus the greenback.