The Federal Reserve could possibly raise USA interest rates as soon as September, an influential Fed policymaker said on Tuesday in comments that boosted the dollar ahead of next week’s signature meeting of world central bankers. The euro was up 0.2 percent at $1.1181 EUR=.
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Against a basket of six major currencies, the dollar lost 0.6 percent to 95.051.DXY.
Soros Fund Management LLC sharply cut its shares in gold in the second quarter, when bullion prices rose to two-year highs, regulatory filings with the U.S. Securities and Exchange Commission showed on Monday.
The Fed has a 2 percent inflation target and tracks an inflation measure which has been stuck at 1.6 percent since March. “So far we seem to be on that trajectory”.
Along with the CPI data, building permits and housing starts for July will be released at 12:30GMT, or 8:30AM ET. USA data on Friday that showed retail sales were unexpectedly flat in July tempered expectations of a Fed interest rate hike this year.
Futures traders raised bets of a September hike to 18 per cent, from 9 per cent on Monday, with a 51-per cent chance of a December move.
Traders also believe that the minutes from the Fed’s July policy meeting, scheduled for release on Wednesday, could give investors more hints as to the direction of monetary policy.
“There is no reason for the Fed to take on risks related to an early rate hike when its inflation expectations remain depressed”.
United States retail figures on Friday showed no growth in July, while economists surveyed by The Wall Street Journal had expected growth of 0.5%, Dow Jones Newswires reported. The consensus forecast is for consumer inflation to be unchanged last month, down from 0.2 percent in June.
Gold prices climbed on Tuesday as investors watched for clues about whether the Federal Reserve would raise interest rates before year’s end.
However, data showed US consumer prices were unchanged in July as the cost of gasoline fell for the first time in five months and underlying inflation moderated. “The dollar will continue to struggle until that chance rises meaningfully”, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
Wall Street closed at record highs on Monday as commodity stocks rose on the back higher oil prices and a weak dollar.
S&P 500 e-minis were down 2.25 points, or 0.1 percent, with 112,640 contracts traded.
Oil prices continued to trade at 5-week highs on Tuesday, fueled by talk of producers taking action to prop up the market.
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All three major USA stocks indexes ended at all-time highs on Monday, extending their record-setting climb of the past few weeks as a rally in oil lifted energy shares, while materials also gained.
