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Fed officials temper rate cuts again
Asian stocks correct after touching 6 month highs and the dollar gets boosted by Fed official comments.
Dollar strengthened on Fed officials' comments on maintaining the current interest rates.
Australian dollar weakened due to less aggressive stance from the Reserve Bank of Australia.
Chinese markets paused after hitting six-month highs, with slight dips in Shanghai indexes.
The Dollar
The dollar gained strength as Federal Reserve officials tempered expectations of a rate cut. The uptrend followed remarks from several Fed officials cautioning that interest rates in the U.S. were likely to stay steady for the remainder of the year.
Despite speculation of a rate cut in September prompted by softer-than-anticipated nonfarm payroll figures released last week, a number of Federal Reserve representatives emphasized this week that persistent inflationary pressures would likely lead to keep the current interest rates.
The AUD
The Australian dollar continued to lag behind as the Reserve Bank of Australia (RBA) adopted a less aggressive stance than anticipated on Tuesday. The AUDUSD pair declined 0.4% this morning, adding to significant drops observed in the previous session following the RBA's less hawkish commentary.
Despite keeping interest rates unchanged and cautioning about persistent inflation in the upcoming months, the RBA refrained from signalling any intention to raise rates further.
Asian Markets
Chinese markets took a breather after surging to levels not seen in over six months. Both the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes dipped by 0.4% and 0.3%, respectively, stepping back marginally from their recent six-month highs following an impressive rebound rally in the preceding months as investors took the chance to buy the dip.
