Yellen is scheduled to address a meeting of central bankers in Jackson Hole, Wyoming, on Friday, and recent comments from Fed policymakers have raised investors’ expectations that she might adopt a less cautious tone on rates.
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The dollar bobbed higher in Asia on Thursday, but major currencies continued to tread water ahead of the global central bankers’ gathering in Jackson Hole, Wyoming, at which Federal Reserve Chair Janet Yellen may offer new clues on United States monetary policy. Trading ranged at $1,322.95-1,326.88 so far – the lower end being a fresh four-week low for the yellow metal. US gold was almost flat at $1,328.90 an ounce.
Recent hawkish statements by Fed officials, including Vice-Chairman Stanley Fischer and New York Fed President William Dudley, have prompted some investors to raise bets that USA interest rates will rise sooner rather than later, and some believe Yellen will echo their signals.
“If there were to be [any] shock from Yellen, it would be that she plays up risk of a rate rise at the 20-21 September FOMC meeting – an event now ascribed only a 27-percent probability by the U.S. rates market”, National Australia Bank said on Thursday. “This might provide at least a modest boost for the big dollar”. US home resales gave a mixed picture on the world’s largest economy, falling more than expected in July after four straight months of strong gains, as a lack of inventory limited choice for buyers.
Shares in Welspun India Ltd rose 0.5 percent, after declining by their daily limits for three straight sessions through Wednesday as the fallout from Target Corp’s decision to terminate business with the firm for passing off cheap sheets as premium Egyptian cotton escalated.
In equities, the Shanghai Composite fell 0.86 percent to 3,059.25 recently. Against the euro, it was changing hands at $1.12740. The dollar index, which tracks the greenback against a basket of six major rivals, was also flat at 94.793.
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“With speculative exposure still near record levels and amid negative chart signals, price risks remain to the downside – the market will be looking to Fed chair Janet Yellen’s testimony on Friday to determine near-term sentiment”, James Moore, a research analyst at FastMarkets, said.
