Asian Shares Up, USD Wallows as Fed Soothes Inflation Fears

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Asian shares rose on Wednesday and the U.S. dollar languished near multimonth lows after U.S. Federal Reserve officials reaffirmed a dovish monetary policy stance, reassuring investors worried about the prospect of rising inflation.

European share markets were set to follow suit, with panregion Euro Stoxx 50 futures up 0.37 in early deals. German DAX futures gained 0.41 and FTSE futures were fractionally in postive territory.

U.S. stock futures pointed to a higher open on Wednesday with SP 500 eminis up 0.32 at 4,198.75.

Richard Clarida, the Fed39;s vice chair, said on Tuesday that the U.S central bank would be able to curb an outbreak of inflation and engineer a soft landing without throwing the country39;s economic recovery off track.

All the same, Clarida39;s comments reflect a shifting tone at the Fed. A month ago, Fed Chair Jerome Powell said it was not yet time to even contemplate discussion of policy tapering, but more recently policymakers have acknowledged they are closer to debating when to pull back some of their crisis support for the U.S. economy.

A similar shift was evident in New Zealand, where the central bank held interest rates at a record low on Wednesday, but hinted at a hike as early as September next year. The prospect of higher rates sent the New Zealand dollar soaring more than 1.

That uncertainty weighed on U.S. stocks overnight, with the Dow Jones Industrial Average down 0.24, the SP 500 off 0.21 and the Nasdaq Composite 0.03 lower.

But in…

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