Dollar slips as market discounts US rate hike

Dollar rises on Fed comments but stocks waver - Yahoo7

The euro rose to $1.1330 from $1.1322, while edging down to 113.55 yen from 113.58 yen.

Canadian wholesale trade increased by 0.7 percent in June from May, the third consecutive monthly gain, Statistics Canada said. The kiwi nevertheless rose to a 15-month high of $0.7351 mid-month.

The greenback had in recent days gained on short covering after hawkish remarks from Fed officials brightened the outlook for the US central bank to raise rates within this year, possibly as soon as next month.

Japan’s Topix index lost 0.3 percent as the yen traded at 100.12 against the US dollar.

FED WATCH: Investors were looking ahead to a speech by Fed chair Janet Yellen at an annual summer gathering in Jackson Hole, for indications of how policymakers view the outlook for economic growth and interest rates.

Traders fear Federal Reserve chair Janet Yellen may use the meeting to indicate that U.S. interest rates are going up.

Indices: Stoxx50 +0.8% at 2,993, FTSE flat at 6,860, DAX +0.8% at 10,631, CAC-40 +0.6% at 4,429, IBEX-35 +0.7% at 8,506, FTSE MIB +1.2% at 16,507, SMI +0.7% at 8,187, SP 500 Futures +0.1%.

Canadian government bond prices were higher across the maturity curve, in sympathy with U.S. Treasuries.

Fed fund futures imply around a 24 per cent chance of an easing in September, rising to around 50 per cent by December.

His remarks re-ignited speculation that the Fed would hike borrowing costs this year- a plus for the dollar – but the greenback’s upswing was short lived. In the USA, drillers added 10 oil rigs in the week to August 19, marking eight straight weeks of rig additions, while Iraq said it plans to increase its exports of crude oil, said Reuters. It will be the fifth straight quarter that earnings have declined from a year earlier.

Oil remained under pressure after shedding 3 per cent on Monday.

Gold is trading atop of its two-week lows as the dollar strengthens from Fed Fischer’s overnight comments that the Fed is close to hitting its targets for full employment and its +2% inflation target.

US crude fell 1.57 per cent to $47.75 after gaining 9 per cent last week, rising for a second straight week. ICE Brent crude, the worldwide futures benchmark, fell $1.65 or 3.2% to $49.23 a barrel.

In company news, shares of Japanese semiconductor maker Renesas Electronics (Tokyo Stock Exchange: 6723.T-JP) dropped 5.21 percent on Tuesday, following a Reuters report, citing sources familiar with the matter, that said the company was nearing an expected $3 billion acquisition of US chipmaker Intersil (ISIL).

The big four banks rose between 1 percent and 1.5 percent while mining giant BHP Billiton gained 0.6 percent and smaller rival Fortescue Metals Group advanced 1.9 percent.

Sterling received punishment on Friday following talks that Theresa May; UK prime minister could invoke the article 50 in April consequently triggering the formal European Union exit negotiations.

Japanese shares fell for the first time in three days as the yen firmed up and the latest survey from Nikkei revealed that activity levels across Japan’s manufacturing sector continued to decline in August.

About author