TSX May Extend Rally After Fed Rate Hike, But Commodities Could Limit Gains
Canada's benchmark index looks set for another day of rally after the U.S. Federal Reserve decided to increase interest rates, citing the ongoing recovery of the economy. With a strong dollar, however, weak commodity prices could limit the advance.
Stock futures for the December quarter on the S&P TSX index were down 0.14% recently.
As expected, the bank has decided to raise the target for the federal funds rate to a range of 0.25% - 0.5% but plans to make gradual future adjustments, depending on the condition of the job market and the inflation. The bank said inflation has continued to run below its 2% target due to declines in energy prices and in prices of non-energy imports. Furthermore, the bank noted that the U.S. labor market showed further improvement, with ongoing job gains and declining unemployment. Recent data showed jobless claims falling to their lowest from a five-month high.
The TSX closed up by 246 points on Wednesday, led by materials and financials.
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