The Asian stock market soared on Thursday after the nominated Federal Reserve Chairman Janet Yellen spoke yesterday that the quantitative easing plan would be continued as long as the economics of the United States does not show satisfactory improvement.
The U.S. dollar came under pressure once again as the majors gained from the U.S. session on Wednesday and still has bullish momentum; moreover, the British pound seems to be in a very firm position where its own economic indicators have showed a significant recovery and now weak U.S. dollar is buttressing it more.
Commodities and Wall Street Surge
On the other hand, the speech given by Janet Yellen raised the investors’ confidence in the commodities as gold rose and is currently trading at around the $1288 level. However, there is strong resistance at 1301 level where sellers may try entering the gold market again.
The idea that investors are about to book profits on the Wall Street was nullified by yesterday’s speech from the Federal Reserve which in turn allowed the bulls to rally the SP 500 index along with Dow Jones index. The SP 500 index rose once again and after breaching its previous top, it went to another record high level of 1783 and may further move ahead to test 1800 psychological level.
The U.S. economy is ‘far short of its potential’ said Janet Yellen in her speech, and these are the key words on which investors may be looking as of now that clearly shows that a huge room for improvement is there and the Federal Reserve would do anything possible to achieve it.
The impact is massive. Shandong Weigao Group of Medical Polymer Company gained nearly 36% in Hong Kong on Thursday, which is tend to be known as abnormal gains.
Plus, the company that assembles iPhones and Sony consoles – Hon Hai Precision Industry – rose by around 2% in Taiwan’s Stock market.
Taper in March
The FOMC meeting to be held in March next year would most probably bring the much-awaited tapering of the stimulus where the bond buying is expected to be brought down to $70 billion a month from $85 billion.
To contact the reporter of this story: Jonathan Millet at email@example.com