Stocks edge higher and oil falls as investors weigh Middle East diplomacy
Brent crude fell 1% to $114.74 a barrel, while investors awaited major technology companies’ earnings and decisions from three central banks.
Dollar holds near two-week high as Fed decision and UK budget loom
Traders expected the Fed to leave rates unchanged, while sterling fell ahead of the British government's spending and revenue plans.
The dollar maintained its recent gains on October 28 as traders awaited the Federal Reserve's rate decision, with its index at a two-week high of 102.39. Sterling fell before the first budget from the government led by Andy Burnham.
Traders broadly anticipated unchanged Fed policy following officials' calls for more evidence on persistent inflation. CME Group's FedWatch tool put the probability of an increase of at least 25 basis points in December at 77%. The 10-year U.S. Treasury yield rose 1.2 basis points to 5.01%.
The euro showed little movement at $1.1126, while the dollar edged lower against Japan's currency to 157.83 yen. Derek Halpenny, MUFG's head of research, global markets EMEA & international securities, said dissenting Fed votes could reinforce market expectations for a December increase.
Sterling declined 0.2% to $1.328 and lost about 0.2% against the euro. British finance minister John Healey was expected to present spending plans for the coming year at 12:30 p.m. GMT. Analysts anticipated taxes targeting banks, gambling companies and online marketplaces as investors assessed how the government would raise revenue.
The New Zealand dollar dropped as much as 1.4% to $0.5598 after the Reserve Bank of New Zealand kept its rate at 2.75%, contrary to the increase expected by a large majority of economists. The Canadian dollar was little changed at 1.406 per U.S. dollar ahead of an expected Canadian rate increase of at least 25 basis points.