Dollar inches up, stocks flat as focus on Fed, BOJ

Tue Sep 20, 2016 5:07pm EDT
 
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By Caroline Valetkevitch

NEW YORK (Reuters) - The dollar edged up while world stock indexes were flat on Tuesday as investors awaited the outcomes of Federal Reserve and Bank of Japan policy meetings that will conclude on Wednesday.

Investor expectations are low that the Fed will raise U.S. short-term interest rates. But the focus will be on Chair Janet Yellen's speech on Wednesday for any hint that the U.S. central bank could hike rates as soon as December.

The Bank of Japan is expected to ease its ultra-loose policies further, according to a Reuters poll of economists.

"Not many think the Fed is going to hike tomorrow, but whether they change the language to get a little more hawkish, there's been conversation around that," said Walter Todd, chief investment officer at Greenwood Capital in Greenwood, South Carolina.

"The Bank of Japan is a whole other issue unto itself... Given the level of uncertainty around those two meetings, I just think people are kind of biding their time."

Nagging doubts about the firepower left available to top central banks have added to volatility in markets recently.

The dollar index rose 0.2 percent .DXY to 95.995, just below the 96.108 mark touched on Friday that was the highest since Sept. 1.

U.S. stocks ended little changed, with healthcare .SPXHC gains offsetting declines in energy .SPNY.   Continued...

 
A man (R) cleans electronic boards showing Japan's Nikkei average, the exchange rate between the Japanese yen against the U.S. dollar and stock quotation outside a brokerage in Tokyo, Japan, in this April 6, 2016 file photo. REUTERS/Issei Kato/Files