Investors are awaiting a report on monthly payrolls data due on Friday, which could support the Fed’s earlier plans for two hikes this year or scuttle any move.
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Yellen did not give a timeframe during her speech at the annual Jackson Hole symposium of global central bankers, but Fed vice chairman Stanley Fischer later said September was a possibility.
“Central banking is in a courageous new world”, Atlanta Fed president Dennis Lockhart said in an interview on the sidelines of the conference.
The U.S. currency has gained nearly 3 percent versus the yen since Friday, when Fed Chair Janet Yellen and Vice Chair Stanley Fischer kept open the possibility of a 2016 rate hike, perhaps as soon as September, at a meeting of central bankers in Jackson Hole, Wyoming.
The dollar bought 101.94 Japanese yen, higher than 101.87 yen in the previous session.
Higher-yielding, or riskier, currencies were also hit, with South Korea’s won losing one percent and the Indonesian rupiah off 0.5 percent, while Malaysia’s ringgit shed 0.7 percent.
Investors bid up the dollar Monday on hopes of imminent rate rise.
Embracing Harvard Professor Larry Summers’ so-called secular stagnation theory, Evans argued that an aging US population and slowing productivity growth mean there is little reason for interest rates to rise either fast or far.
In an interview on Tuesday, Vice Chair Stanley Fischer had said the U.S. jobs market is almost at full strength and that the pace of rate increases by the Fed will depend on how well the economy is doing.
Friday’s USA employment report is expected to show an increase of 180,000 jobs in August, according to the median estimate of 89 economists polled by Reuters, below the better-than-expected 255,000 additions in July. US gold futures for December delivery settled up 0.09 percent at $1,327.10. However, the central bank has maintained that any increase would be gradual. British markets were closed for a holiday.
MSCI’s all-country world equity index was last down 0.5 points, or 0.12 per cent, at 417.92. Platinum was 0.7% lower at $1,062.99, while palladium was down 1.4% at $686.
Pacific Investment Management is reducing Treasuries and favors inflation-linked bonds, according to Scott Mather, chief investment officer of US core strategies and a managing director at Pimco.
“For gold, it’s not an important rate – an important rate for gold when it comes to interest rates is what we call the real interest rate”, he was quoted as saying.
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Crude prices were down more than 1.5% Tuesday morning, as a stronger dollar adds to headwinds for the petroleum sector.
