After a brief dip yesterday, the U.S. dollar index was up 0.1 per cent today at 94.04, recouping its Monday move, while gold, which is sensitive to U.S. interest rate expectations, also reversed course to be down 0.1 per cent at $1,244.19 an ounce.
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In Asia, Hong Kong’s stock market led regional gainers with the broad gauge .HSI rising 1 percent as investors hunted for bargains in one of the cheapest equity markets in the region.
However, Yellen avoided giving the timeline for further rate hikes by saying that she expected the federal funds rate will probably need to rise gradually over time to ensure price stability and maximum sustainable employment in the longer run. She also claimed, quote, “positive economic forces have outweighed the negative”.
“While Yellen indirectly confirmed that there won’t be a rate hike in June, she also sounded confident that the U.S. economy remains strong despite a disappointing U.S. non-farm payrolls report last Friday”, he added in a client note.
Tokyo-Tokyo shares rose cautiously in mid-afternoon trade on Tuesday as the market determined the impact of comments by Federal Reserve Chair Janet Yellen, who said that any United States interest rate hike would be gradual.
The dollar’s weakness saw the euro gain 0.2 percent to $1.1375.
Over the last decade, interest rates have increased only by 0.25 percentage points.
In her speech, she cautioned over a number of uncertainties facing US growth, including the strength of consumer spending, low productivity growth in the country and low inflation.
U.S. S&P 500 Index closed up 0.49 percent to 2,109.41, just about one percentage point below record closing high of 2,130.82. Asian stock markets mostly rallied on Tuesday as investors took heart from reassuring comments by Federal Reserve Chair J.
“The economy added 2.7m jobs previous year, an average of about 230,000 a month”, Yellen pointed out Monday.
Hedge funds and money managers reduced their bullish position in COMEX gold contracts in the week to May 31, when prices fell to 3-1/2-month lows on heightened expectations for a USA interest rate hike, government data showed on Friday. “The pound continues to find itself buffeted by the shifting sands of the latest Brexit polls”, said CMC Markets’ Hewson.
Elsewhere, oil prices held firm after crippling attacks on Nigeria’s oil industry and fresh draws in USA crude stockpiles.
Advancing issues outnumbered declining ones on the NYSE by 2,119 to 928, for a 2.28-to-1 ratio on the upside; on the Nasdaq, 2,014 issues rose and 830 fell for a 2.43-to-1 ratio favoring advancers.
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OIL: Benchmark U.S. crude oil gained 59 cents to trade back above $50 a barrel at $50.28 in electronic trading on New York Mercantile Exchange.
