Fed Chair Janet Yellen on Friday said the case for higher rates was strengthening, while Vice Chair Stanley Fischer later suggested an increase could come as soon as September.
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Growing expectations the Federal Reserve will raise US interest rates this year pushed the dollar up for a seventh time in eight days on Tuesday.
Goldman Sachs’ GS.N 1.1 percent gain made it the top influence and the biggest gainer on the Dow.
US stock index futures were higher on Thursday ahead of a raft of economic data, including a crucial jobs report on Friday.
“The market is now pricing around a 36 per cent probability of a hike in September and it has moved from about 50 to 60 for December, which is considerably higher than a week ago”, said Rabobank’s USA -focused economist, Philip Marey.
The consensus forecast is that the data will show jobs growth of 180,000 in August, following an increase of 255,000 in the preceding month.
Fed Chair Janet Yellen said in a speech last Friday that the case for the Fed raising interest rates has been bolstered by a solid job market and an improved outlook for the USA economy and inflation. Fischer said Friday’s nonfarm payrolls report for August was likely to be key on the decision over a hike in the near term.
According to Investing.com’s Fed Rate Monitor Tool, investors are pricing in a 27% chance of a rate hike by September.
Analysts have said the central bank is most likely to hold off raising rates in September, given inflation rates that run below its 2 percent target and the upcoming USA presidential elections in November.
On Tuesday, the greenback bought 102.11 yen, up from 101.88 yen Monday in NY, while the euro fell to $1.1172 from $1.1187. The Nasdaq Composite closed down 9.34 points, or 0.18 per cent, at 5,222.99.
“Private payroll data out of the US will help to give the market some direction”, MKS said in a note. The extra yield that 30-year bonds offer over five-year notes shrank to the least in more than a year.
“We’re in a world where they seem to work”, Fischer said. U.S. crude settled down 63 United States cents, or 1.34 per cent, at $US46.35 per barrel.
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Gold has a strong downside obstacle at $1,304 and an inability to break it may see a relief rally, said Hareesh V, research head at Geofin Comtrade Ltd. USA gold futures for December delivery settled down 0.8 percent at $US1,316.5 per ounce. Gold declined to a month’s low at $1,321 an ounce, whereas Brent crude retreated 1.4% to $49.41 a barrel.
