The U.S. dollar dropped to an eight-week low against the euro today on speculation that the Federal Reserve will continue to keep interest rates low, making the currency less attractive for investors to hold.
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Strong recent United States jobs growth and a long-awaited return of middle-wage employment were two positive signs for the U.S. labour market, New York Fed president William Dudley had said on Thursday.
European stocks looked set for a similar soggy start, with spreadbetters expecting Britain’s FTSE 100 .FTSE and Germany’s DAX .GDAXI to open 0.2 percent lower, and France’s CAC 40 .FCHI to be down 0.3 percent.
In the Dow, declines in shares of Cisco and those of Caterpillar, down 1.4% and 1.3% respectively, offset advances in shares of Wal-Mart and those of Chevron, up 1.8% and 0.9 respectively.
That reinforced his comments on Wednesday suggesting the Fed could raise interest rates in September, given better economic data since its last meeting in July.
MSCI’s broadest index of Asia-Pacific shares outside Japan pulled back 0.6 percent. “More time was needed to assess the incoming information over the coming months, although downside risks had clearly increased”.
San Francisco Federal Reserve Bank President John Williams on Thursday joined a growing chorus of his colleagues signaling support for a USA interest rate hike in coming months, saying that waiting too long could be costly for the economy.
Saying he is in no hurry to raise rates, Williams nevertheless warned that the economy could overheat if rates are kept low for too long, like a party at which the host fails to remove the punch bowl.
The index of the dollar against a basket of six major currencies was up about 0.2 per cent at 94.359. It was on track to gain 1.6 percent for the week. That has helped boost the yen, which this week traded as high as ¥99.54 per dollar, its strongest since June 24 and the aftermath of the UK’s Brexit vote. It is still on track to lose 1 percent on the week. The common currency was headed to gain 1.7 per cent this week.
Brent crude prices rose to their highest since July 4 as the world’s biggest producers prepared to discuss a possible freeze in production levels. It is poised to add 8.7 percent for the week.
US crude CLc1 was up 0.2 per cent at $48.33 a barrel, within close reach of $48.38, its highest since July 5 scaled overnight.
Both benchmarks have risen more than 20 percent from a lowin early August.
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Other markets: Oil futures ended up, rallying more than 20% above the August 2 low of $39.51 a barrel, driving it back into bull-market territory (http://www.marketwatch.com/story/gains-for-oil-prices-fade-on-persistent-worries-over-global-supply-glut-2016-08-18).
