USD hit its one-month high after the Fed hinted at tapering, US business optimism in China rebounds to pre-trade war levels

As the Fed concluded its meeting on Wednesday, tapering has not been announced. However, it hinted that “a moderation in the pace of asset purchases” may happen soon. Powell added that tapering could conclude around mid-2022, with potential interest rate hikes after that. After the meeting, USD was up on Thursday morning in Asia, hitting its one-month peak. JPY recorded its sharpest decline in three months against USD. The Bank of Japan has decided to keep its interest rate steady at -0.1%. ECB is also expected to keep the rate steady.

During a recent survey conducted by the American Chamber of Commerce in Shanghai, US companies in China have their business optimism rebounded to the pre-trade war level. Although they have reservations about Beijing’s COVID policy, their 5-year outlook remains largely positive. 78% of the respondents described themselves as “optimistic or slightly optimistic”, versus only less than 60% of them responded so in 2020.