The Japan Times - Stocks diverge, dollar down as Fed meets on rates

The Fed's two-day gathering is widely expected to conclude Wednesday with the central bank agreeing to trim borrowing costs, as policymakers try to shore up the world's biggest economy.

The dollar dropped against main rivals Tuesday as lower interest rates make the greenback less attractive to investors, while safe haven gold hit yet another record high.

"The Fed's focus appears to have shelved inflation concerns for now, instead concentrating on a stalling (US) jobs market which should lead to a 0.25-percent cut," noted Richard Hunter, head of markets at Interactive Investor.

Wall Street's S&P 500 and Nasdaq indices pushed to fresh record highs Monday, boosted by the United States and China reaching a framework deal over their TikTok dispute.

Trump and Chinese counterpart Xi Jinping were set to speak Friday to finalise the agreement, after Washington's pressure to have the video-sharing app find a non-Chinese buyer or face a US ban.

The Fed meeting takes place with Trump appointee Stephen Miran as a new member of the bank's rate-setting committee after the Senate narrowly voted to confirm his appointment late Monday.

The vote came just as a US federal appeals court ruled that Fed Governor Lisa Cook can remain in her position while challenging her ouster from the bank -- after Trump sought to fire her.

Miran's appointment comes as the president demands that the Fed cuts borrowing costs and as Trump accuses the central bank's chief Jerome Powell of being unfit for the job.

Expectations that US rates will be reduced over the next few months and possibly into 2026 continued to weigh on the dollar and pushed up gold to an all time peak close to $3,700 an ounce.

The British pound firmed versus the dollar, also as analysts increasingly expect the Bank of England to maintain its key interest rate on Thursday and for the remainder of 2025.

Official data Tuesday showed UK unemployment remaining at a four-year high 4.7 percent amid stubbornly-high British inflation.

- Key figures at around 1040 GMT -

London - FTSE 100: DOWN 0.3 percent at 9,253.60 points

Paris - CAC 40: DOWN 0.1 percent at 7,892.12

Frankfurt - DAX: DOWN 0.5 percent at 23,636.41

Tokyo - Nikkei 225: UP 0.3 percent at 44,902.27 (close)

Hong Kong - Hang Seng Index: FLAT at 26,438.51 (close)

Shanghai - Composite: FLAT at 3,861.87 (close)

New York - Dow: UP 0.1 percent at 45,883.45 (close)

Euro/dollar: UP at $1.1809 from $1.1768 on Monday

Pound/dollar: UP at $1.3636 from $1.3609

Dollar/yen: DOWN at 147.04 yen from 147.38 yen

Euro/pound: UP at 86.62 pence from 86.47 pence

Brent North Sea Crude: DOWN 0.1 percent at $67.35 per barrel

West Texas Intermediate: DOWN 0.1 percent at $63.27 per barrel

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T.Sasaki--JT