| The Federal Reserve keeps interest rates on hold at 5.25%
FXstreet.com (Barcelona) – The Federal Reserve's Monetary Policy Committee has decided to maintain interest rates unchanged at 5.25% after their monthly monetary policy meeting.The decision has been taken in a context of moderate economic growth, according to the Federal Reserve's statement, with volatile financial markets and tighter credit conditions for households and businesses. Nevertheless, according to the Fed the economy seems to be expanding at a moderate pace over the coming quarters, supported by growth on incomes and employment.The odds are now in favour of a rate cut before the end of the year pressed by the economic slowdown U.S. economy is going through, specially notorious in the housing market and mortgage sector. On the other hand, higher than desirable inflation keeps the Federal Reserve´s aim off the temptation of a too fast rate cut, although readings on core inflation seem to have entered a moderation cycle.
S.Korea won up on rate rise, revived risk appetite
SEOUL, Aug 9 (Reuters) - The South Korean won rose against the dollar on Thursday after the central bank's unexpected interest rate rise and on reviving appetite for risk after the Federal Reserve's positive views of the U.S. economy. Foreign investors turned net buyers of Seoul shares after a prolonged period of selling in the KOSPI, and exporters bought the won for settlements, providing further support to the local unit. The won is seen rising further as supplies from foreign equity investors are likely to decrease and as South Korean companies keep winning big foreign orders. But the local currency gave up some of its early gains on offers from importers and as overseas investors sought to repatriate the proceeds from heavy sales of Seoul stocks. The won was last quoted at 922.8/3.1 per dollar, compared to its previous closing bid of 923.7.
Federal Reserve keeps federal funds rate the same
WASHINGTON - The Federal Reserve left a key interest rate unchanged on Tuesday as worries about inflation trumped concerns about turbulent financial markets. Fed Chairman Ben Bernanke and his colleagues voted unanimously to keep their target for the federal funds rate, the interest that banks charge each other, at 5.25 percent, where it has been for more than a year. The Fed decision came after a volatile couple of weeks on Wall Street as investors have been beset by troubles in global credit markets stemming from a sharp rise in defaults on subprime mortgages. In a brief statement, the Fed acknowledged the turbulence and said the downside risks to the economy had "increased somewhat." But the Fed continued to state that the predominant risk remained that inflation "will fail to moderate as expected." Many analysts believe the Fed will remain on hold through the rest of this year, preferring to watch and make sure that inflation moderates back to an acceptable level.
Fed injects $2B more into banking system
The Federal Reserve injected an additional $2 billion into the banking system Monday, marking the second time in as many sessions that the central bank has taken steps to help soothe jittery financial markets. On Friday, the central bank injected $38 billion into the U.S. banking system in an effort to cool Wall Street fears about a credit crunch. The New York Fed said in a statement it was ready to conduct additional operations during the day as needed. .
India is waking up to tackling glut of cash
Indian authorities may have finally become serious about mopping up unwarranted liquidity in the banking system. With Tuesday's announcement of a 50-basis-point increase in the ratio of deposits that lenders have to keep with the central bank as unremunerated reserves, the call-money rate may now rise from the 0.17% level to which it fell last week. Overnight rates hovering near zero in an economy that's growing at a 9% annual pace, and where inflation may be simmering just beneath the surface? That wasn't just ridiculous; it was plain dangerous. .
US Fed leaves key interest rate unchanged
WASHINGTON (AP) - The Federal Reserve left a key interest rate unchanged on Tuesday as worries about inflation trumped concerns about turbulent financial markets. Fed Chairman Ben Bernanke and his colleagues voted unanimously to keep their target for the federal funds rate, the interest that banks charge each other, at 5.25 percent, where it has been for more than a year. The Fed decision came after a volatile couple of weeks on Wall Street as investors have been beset by troubles in global credit markets stemming from a sharp rise in defaults on subprime mortgages. In a brief statement, the Fed acknowledged the turbulence and said the downside risks to the economy had "increased somewhat.'' But the Fed continued to state that the predominant risk remained that inflation "will fail to moderate as expected.'' Many analysts believe the Fed will remain on hold through the rest of this year, preferring to watch and make sure that inflation moderates back to an acceptable level. Tuesday marked the ninth consecutive meeting where the Fed has left its key policy lever unchanged.
Reuters Canada Business Summary
WASHINGTON (Reuters) - The Federal Reserve on Tuesday held benchmark U.S. interest rates steady and said that while tightening credit conditions had increased downside risks facing the economy, inflation was still its main concern. The decision by the central bank's Federal Open Market Committee kept the overnight federal funds rate at 5.25 percent, the level it hit in June 2006 after 17 straight quarter-percentage-point increases. U.S. asks binding arbitration in Canada lumber case WASHINGTON (Reuters) - The United States asked for binding arbitration against Canada on Wednesday in the latest flare-up of a two-decade dispute over softwood lumber. U.S. Trade Representative Susan Schwab said the United States "has no choice but to initiate arbitration proceedings to compel Canada to live up to its SLA (Softwood Lumber Agreement) obligations." Toronto stocks endure bumpy ride to end flat TORONTO (Reuters) - The Toronto Stock Exchange's main index ended flat on Tuesday after a warning by the U.S.
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