Investors shifted their attention to the Fed as the Federal Open Market Committee begins a two-day policy meeting on Tuesday. The central bank is widely expected to leave interest rates unchanged when it announces its decision on Sept. 20, but investors are awaiting details on its reduction of $3.7 trillion in Treasurys and mortgage-backed securities bought during the financial crisis.
Ahead of the event, the dollar extended gains against the yen after creeping higher overnight to trade around an eight-week high. The U.S. currency fetched 111.74 yen at 2:53 p.m. HK/SIN. Meanwhile, the dollar index, which tracks the U.S. currency against a basket of currencies, edged down to 91.770, compared to the 91.9 handle seen on Monday.
“Speculation around the impending FOMC meeting is … driving the U.S. dollar, with markets eyeing both the unwind of the balance sheet and any tweaks to the dot plot,” Felicity Emmett, senior economist at ANZ, said in a morning note.
Stocks on Wall Street closed higher on Wall Street, with the Dow Jones industrial average rising 0.28 percent, or 63.01 points, to close at 22,331.35 — its fifth consecutive record close.
Elsewhere, the pound firmed after being pushed lower overnight following Bank of England Governor Mark Carney’s Monday comment that future hikes in interest rates could be “at a gradual pace and to a limited extent.” Sterling traded at $1.3526 at 2:53 p.m. HK/SIN, compared to the $1.358 handle seen during Asian trade on Monday.
In corporate news, Chinese search company Baidu announced over the weekend it had hired Herman Yu as its chief financial officer. Yu was formerly the CFO of Weibo, a microblogging platform. In a statement addressing the appointment, Baidu CEO Robin Li said the company was looking forward to entering “the next stage of growth in the AI [artificial intelligence] era.”
Meanwhile, the institutional tranche of Chinese online insurer ZhongAn Online Property and Casualty Insurance’s initial public offering has been oversubscribed, Reuters said Monday. The insurance company is expected to debut on the Hong Kong exchange Sept. 28, according to Reuters.
In economic news, the Reserve Bank of Australia’s minutes showed the central bank was positive about resilience in the country’s jobs market, but expected wage growth to remain slow, Reuters said. The RBA was also concerned about household debt levels and strength in the Australian currency, according to Reuters.
The Aussie dollar fetched $0.7982 at 2:54 p.m. HK/SIN after spiking as high as $0.7993 immediately after the release of the minutes.