The index fell to a session low of 94.935 following the release of Brainard’s remarks.
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Against the yen, the dollar slid to 101.72 yen from Monday’s high of 102.82 yen, though it held above last week’s low of 101.20.
A top Federal Reserve official on Monday called for continuing taking a prudent approach to further increasing interest rates because of potential weakness in the US and global economy.
Over the a year ago, Brainard has been one of the Fed’s most vocal defenders of low interest ratepolicy, arguing the United States is vulnerable to economic troubles in Asia and Europe.
Domestic manufacturing sales data for July is due for release on Friday.
“If 1.6 percent inflation and 4.9 percent unemployment were all you knew about the economy, would you consider a policy setting one tick above the zero lower bound still appropriate?” he asked.
Copper climbed off a 12-week low as US rate hike jitters subsided.
But any sense of calm in markets looked fragile after three volatile trading days that saw bond yields soar and stocks rack up heavy losses, on concern monetary policy was reaching its limits as a tool to lift the global economy. Oil prices rose as softer dollar and stronger US equity markets helped crude futures recover from earlier losses.
In her speech, Brainard cited the global economic problems as a reason to be cautious about raising USA rates.
The greenback opened at NT$31.700, and moved between NT$31.590 and NT$31.720 before the close.
USD/JPY is supported around 101.00 levels and now trading at 101.87 levels. A weaker dollar supported a broad recovery in crude oil and helped precious metals pare earlier losses.
Federal Reserve Governor and FOMC member Lael Brainard cautioned against raising interest rates too quickly Monday, seemingly contradicting comments made last week by colleague Eric Rosengren.
Bond prices rose. The yield on the 10-year Treasury note fell to 1.67 percent from 1.68 percent.
Spot silver climbed 0.8% to $19.21/oz, after hitting an over one-week low of $18.69 in the previous session. With so much uncertainty over when the Fed will actually take action to raise rates, “I think there are a lot more investors that are going to go to cash and just wait and see what happens”, he added.
The Federal Reserve should avoid removing support for the USA economy too quickly because of potential weakness in the labor market and risks of foreign economic downturns, Fed Governor Lael Brainard said on Monday.
In Toronto, the S&P/TSX composite index climbed 57.14 points to 14,597.14, while in NY, the Dow Jones industrial average surged 239.62 points at 18,325.07.
Minneapolis Fed President Neel Kashkari said “politics does not play a part” in the Fed’s deliberations and that current low US inflation means there is no “huge urgency” to hike.
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The gap between five-year note yields and 30-year bond yields widened to 119 basis points, resulting in the steepest yield curve since August 5.
