Odds of Fed rate increase this year remain below 50% South Korean won climbs to October high; yen rebounds Share on Facebook Share on Twitter The fallout from yesterday’s Federal Reserve statement continued to reverberate through global markets, with the dollar extending declines, emerging-nation currencies getting a boost and gold gaining on optimism the central bank will take a cautious approach to raising interest rates. The dollar extended losses, weakening against all but two of its 16 major peers, as bets on a rate increase in 2016 remained below 50 percent. South Korea’s won climbed to the highest since October and gold rose for a third day. Facebook Inc. rallied after reporting a 59 percent jump in sales. Banks led declines in the Stoxx Europe 600 Index after Lloyds Banking Group Plc said it planned to cut 3,000 more jobs and warned Britain’s vote to leave the European Union may hurt earnings and dividends. Positive corporate earnings and signs central banks will step in to support economic growth have helped lift global equities to their biggest monthly gain since March. While admitting risks to the U.S. economy had subsided, the Fed left interest rates unchanged on Wednesday as policy makers assessed the fallout from Brexit. “The Fed comments were less hawkish than expected,� said Benno Galliker, a trader at Swiss Luzerner Kantonalbank AG. “There will be a hike this year, but later than in September. The stock market still has some room to go for the next few weeks.� Chair Janet Yellen has repeatedly stated that the Fed is likely to raise borrowing costs gradually, though market volatility and an unexpected dip in job gains have delayed such plans. In Japan, traders are looking ahead to Friday’s monetary policy review, after Prime Minister Shinzo Abe announced a fiscal-stimulus package exceeding 28 trillion yen ($267 billion) on Wednesday in a bid to jump-start the economy. Currencies The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, lost 0.3 percent as of 9:33 a.m. in New York. Against the euro, the U.S. currency was headed for its biggest two-day slide since June 23, the day of the U.K. referendum on its membership of the European Union. South Korea’s won jumped 0.9 percent and Malaysia’s ringgit gained 0.8 percent. “We’re seeing broad dollar weakness,� said Yuji Kameoka, the chief foreign exchange strategist at Daiwa Securities Co. in Tokyo. “Even though the Fed did note some improvements in the economy, a rate hike in September still isn’t certain.� The yen climbed 0.5 percent to 104.92 per dollar after dropping 0.7 percent on Wednesday. A majority of economists polled by Bloomberg predict Bank of Japan Governor Haruhiko Kuroda will boost asset purchases on Friday and lower the already negative key rate. The pound slipped against all of its 16 major counterparts with swaps trading indicating that the Bank of England is certain to cut its key interest rate rate next week. Sterling dropped 0.5 percent to $1.3154. Stocks The S&P 500 Index was little changed after falling 0.1 percent on Wednesday, while the Nasdaq Composite Index added 0.2 percent. Facebook jumped 3.9 percent in early New York trading. The social-network provider reported second-quarter revenue and user growth that exceeded analysts estimates after markets in the U.S. closed. Mastercard Inc., the second-largest U.S. payments network, advanced 2.1 percent after saying profit rose 6.7 percent as customer card spending increased. The Stoxx Europe 600 slipped 0.5 percent. The gauge is less than 2 percent away from its June 23 level, the day of the U.K.’s EU referendum, while U.S. and Asian shares have already recovered from their losses, with the S&P 500 trading near a record. Banks fell the most among Stoxx 600 industry groups. Lloyds lost 4.5 percent after saying Brexit would reduce the amount of capital it will generate this year by 40 basis points. Banca Popolare di Milano Scarl, Deutsche Bank AG and Banco Popular Espanol SA declined more than 3 percent, with the latest stress-test results to be released on Friday. Royal Dutch Shell Plc lost 3.6 percent and Spain’s Telefonica SA slid 4.7 percent after they posted profit drops. SABMiller Plc retreated 2 percent and Anheuser-Busch InBev NV dropped 2.6 percent after the U.K. brewer suspended work on integrating its operations with that of its Belgian suitor. Anglo American rallied 5.7 percent, sending mining shares to the biggest advance among industry groups, after posting sales and profit that topped projections. Adidas gained 4.6 percent after raising its full-year forecasts for sales and profit. Commodities Oil traded near the lowest close in more than three months after government data showed U.S. crude stockpiles unexpectedly rose, adding to a glut of supplies that are at the highest seasonal level in at least two decades. West Texas Intermediate crude decreased 0.2 percent to $41.84 a barrel and Brent slipped 0.5 percent to $43.24. “There is still a surplus and the oil price is going to have difficulty sustaining any rally because of that,� David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “We’re now heading toward the end of the drive season and the market is probably going to weaken further. The $40 a barrel level looks like the base at the moment.� Industrial metals advanced. Nickel added 1.7 percent while copper rose 0.8 percent. Iron ore made a comeback as Chinese steel mills increased production. Futures on the Dalian Commodity Exchange closed 1.4 percent higher at 472.5 yuan ($70.9) a metric ton, the highest since the peaks reached during the speculative frenzy in April. Gold gained 0.2 percent to $1,342.95. Bonds Treasuries declined for the first time in three days, pushing the 10-year yield up three basis points to 1.53 percent. The yield slid on Wednesday by the most since July 5 after the Fed’s rate decision. Germany’s benchmark 10-year bund was little changed, with the yield at minus 0.07 percent. Australian bonds gained, with yields on notes due in a decade declining for the first time this week, down nine basis points to 1.87 percent. In New Zealand, similar maturity bond yields slipped four basis points to 2.24 percent. Rates on Japanese notes climbed by two basis points to minus 0.275 percent.

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