Mike Rogers Calls for End to US-Canada Tariff War 
US Dollar Hits 18-Month High as Fed Signals More Rate Hikes 
Dollar Near 18-Month High as Euro, Yen and Pound Weaken 
Wall Street Falls as Fed Minutes Signal Another Rate Hike 
Crypto Market Selloff Wipes Out $100B as Bitcoin Falls Below $83K 
Asian Currencies Mixed as Yen Weakens, Dollar Holds Firm 
RBI Raises Repo Rate to 5.50% in Hawkish Shift on Inflation Risks 
US, EU Push for Action Against Asia’s Excess Factory Capacity 
Asian Stocks Mixed as OpenAI Revenue Concerns Hit Chipmakers 
Oil Prices Rise as Gulf Hurricane and Middle East Supply Risks Mount 
Oil Prices Trim Gains After Trump Rules Out Iran Strikes Before Midterms 
Add as a preferred source on Google
The Federal Reserve’s dovish stance is expected to prop up EM Asian currencies when the 2019-nCoV outbreak shows signs of stabilization in the next one to two weeks, according to the latest research report from Scotiabank.
The Fed voted unanimously to maintain the target range for the fed funds rate at 1.50-1.75 percent, expressing confidence about the economy’s health in its post-meeting statement. The FOMC judged the current stance of monetary policy is appropriate to support sustained expansion of economic activity.
As many had expected, the Fed lifted IOER from 1.55 percent to 1.60 percent to ensure the fed funds rate to move up a little bit and raised its reverse repo rate from 1.45 percent to 1.50 percent.
In addition, the Fed downgraded its assessment of household spending, saying it has been rising at a moderate pace rather than a "strong" one in the December statement, but reiterated that business fixed investment and exports remain weak.
Fed Chairman Jerome Powell said at his post FOMC press conference that the Fed is "not comfortable with inflation running persistently below our 2 percent symmetric objective." Powell noted that the 2 percent goal is "not a ceiling," suggesting the US central bank will allow price gains to rise above that level.
The dollar/yuan will likely stay below 7.00 as China’s central bank is expected to defend the yuan exchange rate amid hovering concerns over the 2019-nCoV outbreak, the report added.
In addition, a steady yuan exchange rate is needed to help stabilize A shares when China’s onshore markets reopen next Monday (3 February) after the Chinese New Year holidays, together with the PBoC’s commitment to providing liquidity support.
"EM Asian currencies will rally when the Wuhan coronavirus situation stabilizes or improves in the coming weeks. We would like to sell USD/CNH at 6.97 now with a target of 6.85 of and a stop of 7.05," Scotiabank further commented in the report.
