Federal Reserve Chair Janet Yellen had said on Friday the case for “an increase” in the policy rate has strengthened in the recent months due to improvements in the labour market and expectations for solid economic growth.
Advertisement
The dollar index, which measures the U.S. currency’s strength against major currencies, was trading at 95.527, down 0.04% from its previous close of 95.566.
TOKYO -Currencies weakened across Asia on Monday amid growing expectations of a USA interest rate increase, but while Japan stocks got some welcome relief, emerging-market equities fell.
The rupee opened at 67.14 per dollar and touched a low of 67.19, a level last seen on 22 August.
Stock markets across the world dipped Monday as investors tried to second-guess the US Federal Reserve on the timing of its next interest rate hike. “We’re looking for pockets of value, which in the bond market, we see in things like inflation-linked bonds”.
Technically, gold turned bearish in the near-term as prices has shown four consecutive lower highs (1375-1367-1357-1342) from the yearly peak of $1375, which reinforces the probability of further weakness in the coming days. Investors sold Asian currencies in response to the dollar’s rise, which encouraged profit-taking in their respective equity markets. Mylan hiked the price of the EpiPen from approximately $100 in 2009 to more than $600 in 2016.
Gold is highly sensitive to the rising United States interest rates, which increases the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced. The dollar index closed at 95.58, reversing an earlier gain of 0.3%. That reinforced bets of a rate rise soon, even as other data showed US inflation remained subdued.
The dollar gained 0.3% against the yen to trade at Yen102.2970 Tuesday, while the euro fell 0.2% against the buck to $1.1169. Benchmark 10-year U.S. Treasury yields US10YT=RR were last at 1.565 percent, roughly unchanged from late Monday. Spot gold was down 0.2 percent at $1,320.33 an ounce at 1149 GMT, while US gold futures for December delivery were down $3.7 an ounce at $1,323.40. Higher interest rates tend to encourage investors to move out of non-yield-bearing assets like precious metals.
However, a fall in commodity shares, the best performing sector in European stocks this year, kept a lid on gains in the broader market.
Advertisement
“With a significant economic calendar in store for the next few days for the U.S. economy, there is a window of opportunity for markets to shift their expectations from a hawkish hold to perhaps an outright rate hike”, he said in a note. The pan-regional FTSEurofirst 300 rose 0.5 per cent as banking and industrial stocks advanced.
