Recent comments from Fed officials suggested a hike in the world’s largest economy could be on the cards as soon as next month, but signs of restraint within the rate-setting committee brought relief to markets, sending global bond yields lower.
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The cost of borrowing in the U.S. has been at that level since December 2015.
New York: The US dollar fell against other major currencies as investors were digesting the newly-released Federal Reserve minutes for its July policy meeting.
NY markets were slightly positive, with the Dow Jones industrial average ahead 21.92 points to 18,573.94, while the broader S&P 500 gained 4.07 points to 2,182.22.
MSCI’s broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS pulled back 0.6 percent.
Japan’s Nikkei erased earlier gains to trade 0.1 per cent lower, set for a weekly loss of 2.6 per cent.
The fall in the dollar dominated currency market moves.
The figure for May was revised to 24,000 from 11,000 and the June figure was revised to 292,000 from 287,000.
The U.S. dollar declined 0.1% against the Japanese yen to ¥101.244, while the euro rose 0.2% to $1.1185.
The dollar again weakened against the euro, the yen and the British pound on Thursday as markets continued to absorb ambivalent signals from the United States central bank. That’s because rate-hike bets are intricately tied to the performance of the United States dollar, and a stronger greenback usually weighs on precious metals. The CME Group’s FedWatch Tool indicates traders are pricing in a 82% probability the target will remain at 0.25% to 0.5% as of September 21, down just slightly from the 85% odds on Tuesday.
Some Fed officials preferred to wait for more evidence that USA inflation would rise to the central bank’s objective of 2 percent on a sustained basis, while other officials anticipated that economic conditions would soon warrant another rate increase, according to the minutes of the Fed’s July 26-27 meeting.
Officials anxious about the fallout from Britain’s vote, and while they were not ready to take action just yet, they left open the door for new stimulus, possibly as soon as September.
The dollar index, which tracks the greenback against a basket of six peers, rose 0.2 per cent to 94.336. Oil was down 25 cents to $46.33 a barrel in NY.
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A weaker United States dollar makes gold cheaper for holders of other currencies. The Standard & Poor’s 500 index gained 4.07 points, or 0.2 percent, to 2,182.22 after falling as much as 10 points early on. A good monsoon also bodes well for gold.
