SINGAPORE - Asian stocks took a breather on Thursday, hovering near their highest in two years as traders waited for more U.S. policy clues, while sterling was steady before a Bank of England meeting where rates are expected to remain unchanged.
Most economists in a Reuters poll last week thought the central bank would start to cut rates in August, but markets see only a 30% chance of an August rate cut and think a first move is more likely in September or November.The Swiss National Bank on the other hand is widely expected to cut its key policy rate by 25 basis points for a second straight meeting. Norway's central bank is likely to keep its key policy interest rate unchanged.U.S.
Weston though cautions index market breadth has been poor, with participation underwhelming, suggesting the rally has been built on a shaky foundation. The Japanese yen languished at 158.05 per dollar as the wide difference in the interest rates between Japan and the United States weigh on the currency. The yen is down over 10% against the dollar this year."I think the best-case scenario is September Fed interest rate cut that narrows the yield differential between dollar and yen", according to Stefan Hofer, chief investment strategist, LGT Bank Asia.
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