Dollar rallies after Fed ends QE, as markets await UK public finances – business live

Markets are braced for the latest assessment of Britain’s public finances, as Ryanair faces critics at its AGM

Shares in Ryanair have fallen by 1.5% in early trading, extending their recent losses.

Shares in Ryanair have slipped 10% since it announced plans to cancel flights.

The selloff this morning is all about mounting concern over rising cost pressures which are likely to hit margins and profits.

Ryanair shareholders are gathering in Dublin for the budget airline’s AGM, and it could be a very bumpy ride.

Investors were already planning to revolt against executive pay at the airline, and vote against and the re-election of chairman David Bonderman. That was before this week’s debacle over staff holidays, which means thousands of passengers are suffering flight cancellations.

Ryanair could sell tickets for its AGM later today – if it weren’t for the fact that it would probably have to cancel a whole load of them at very short notice owing to a mess-up with its boardroom holiday rota.

Can you please, please let us in @Ryanair? We are not allowed passed this point. #thanks pic.twitter.com/uWJdWuxwph

Disappointingly, Janet Yellen didn’t give us any new clues yesterday on whether she’ll seek a second term when her current stint as Fed chair ends in February.

Donald Trump’s criticism of the Fed’s actions has put Yellen’s future in doubt. Potential replacements include veteran investment banker Gary Cohn (currently director of the National Economic Council), or former Fed governor Kevin Warsh.

Yesterday’s Fed decision was deliberately long term. Consider it insurance against Fed Chair Ivanka https://t.co/1JzjZLy74U #economics #ubs

The Financial Times says the Fed’s decision to start unwinding QE is “historic”:

Thursday’s FINANCIAL TIMES: “Fed calls historic end to crisis-era QE and signals further rate rise” #tomorrowspaperstoday pic.twitter.com/rhIXaxZHYq

Today’s @TimesBusiness front page: Fed weans US off stimulus after nine yearshttps://t.co/3wXbQjvzKs pic.twitter.com/cjDEZBvzln

The strength of the US dollar has pulled sterling back down to $1.348, away from last week’s one-year high over $1.36.

The euro has also taken a hit, down over one cent to below $1.19.

Alex Lydall, Head of Dealing at Foenix Partners, says Janet Yellen’s optimistic tone has helped to drive the dollar up.

The greenback rallied overnight as Fed chair Yellen signalled the official end to QE and crucially kept the door ajar for rate hikes this year despite split opinions on inflation trajectory among members.

Considering the catastrophes of late in the form of hurricanes, a sanguine approach from the Fed left markets aware a hike in December is still very much on the cards. Acknowledgment, not worry, was the general tone and optimism on the global outlook positions the Fed nicely coming into year-end with the process of balance sheet normalization set to kick-off in October.

If you missed last night’s Fed announcement, here’s the latest Dot Plot (in yellow) showing how policymakers expect US interest rates to rise over the next few years.

Here’s the only CHART that matters this morning. {DOTS<Go>} on @TheTerminal. And our full post-#FOMC analysis: https://t.co/uh72djsvEX pic.twitter.com/3OFvPxOkTA

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The move, announced after a two-day meeting by Fed officials, will start the gradual reduction of the central bank’s $4.5tn portfolio of bonds and other securities, bought to keep interest rates close to zero in an attempt to kickstart the economy.

“The basic message here is that US economic performance has been good,” Fed chair Janet Yellen said at a press conference. The Fed’s decision had been made because “we feel the US economy is performing well” but she added the Fed could reverse course if conditions changed.

Related: The great unwinding: Fed begins slow demise of its post-crash stimulus

US Dollar Rallying as FOMC Signals Start of QE Unwind Next Month https://t.co/4PmU3s1rfq via @CVecchioFX pic.twitter.com/dNX1kE4O13

Asia stocks edging higher w/ reflation theme extending following Fed decision to begin bal sheet normalization & BoJ on hold. Dollar shines. pic.twitter.com/Y2ya8I9Tj9

Related: More Ryanair cancellations likely as pilots reject cash to work on days off

Continue reading…