“It is looking more likely that we will see a rate hike this year, and September is a good possibility”, said Richard Sichel, chief investment officer of Philadelphia Trust Co in Philadelphia.
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Asked about the dollar on Tuesday, Fischer said the currency’s strength affected USA inflation and company profits but improvements in the labor market showed the economy had withstood this headwind.
According to vice chairman Stanley Fischer, the Fed could act as soon as next month.
LONDON – Gold fell on Tuesday after Federal Reserve officials sounded a hawkish note on interest rates, boosting the dollar, while attention turned to USA payrolls data this week for further clues on the pace of rate hikes. Among the releases to be scrutinized will be US consumer confidence for August, due on Tuesday, while productivity, manufacturing and construction figures are due on Thursday.
He added, however, that any decision would remain “very much data-dependent”.
“A soft number would be no surprise after two unusually strong months, which would put paid to the chance of a move in September”.
But more than three years on, the policy blitz appears to have had little lasting impact with the economy stalling in the second quarter.
Iran also said late last week that it would only cooperate in upcoming producer talks in September if other exporters recognized Tehran’s right to regain market share lost during worldwide sanctions that were only lifted in January.
“The Sensex returned strong earnings growth trends during past Fed hike cycles and market returns tended to track earnings growth closely”. South Korea’s Kospi fell 0.3 percent to 2,032.35.
But while the greenback and Japanese traders took heart from the comments, other regional markets turned negative on the prospect of a rise in borrowing costs.
Europe’s broad FTSEurofirst 300 index .FTEU3 closed down 0.17 percent, at 1,350.4. Singapore was 0.8 percent lower in late trade, while Shanghai finished marginally lower.
“We reiterate our view that gold prices will weaken, resulting in an annual average price of $US1,258/oz in 2016, and $US1,241/oz in 2017”, said Christopher Louney, commodity strategist for RBC Capital Markets. Brent crude, used to price oil internationally, lost 75 cents to $49.40.
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Despite a chorus of hawkish comments from Fed officials in recent sessions, currency speculators had trimmed their bets on the US unit for a fourth straight week through the week ended August 23, reducing their net dollar-long positions to their lowest level since early July.
