July 11, 2019: Asian markets rallied Thursday and the dollar suffered further across-the-board losses after the head of the Federal Reserve all but guaranteed an interest rate cut this month.
In the first day of closely watched congressional testimony, Jerome Powell said the case for lower borrowing costs “had strengthened” owing to headwinds caused by global trade uncertainty.
The comments sparked much-needed relief on trading floors around the world, having suffered steep losses at the start of the week in reaction to a blockbuster US jobs report that dented hopes for a steep Fed cut at its next policy meeting.
US equities surged, with the Nasdaq ending at a record high and the greenback going into retreat, and the trend continued into Asia.
Hong Kong jumped more than one percent and Shanghai added 0.6 percent, while Tokyo ended the morning session 0.4 percent higher.
Seoul was up 1.2 percent, Sydney rose 0.2 percent, Singapore climbed 0.8 percent and Taipei put on 0.4 percent.
Manila, Wellington and Jakarta also shifted into positive territory.
“One of the principal drivers of soaring stock market valuation is the thought that easy monetary policy will bolster the US economy, which isn't struggling, and spur on an even more scintillating stock market rally for the remainder of 2019,” said Stephen Innes at Vanguard Markets.