The outbreak of stock market nerves in recent days, which decisively called time on August’s record lows in volatility, has only been partially soothed by dovish comments from the US Federal Reserve.
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Still, the dollar later received some support from buying to cover short positions, as shares resumed their ascent.
Fed governor Lael Brainard triggered a late session rally in the US stock markets when she said in a speech that, while economic progress continues, it would be wise for the Fed to keep monetary policy loose.
Other markets: The dollar struggled for direction (http://www.marketwatch.com/story/dollar-steadies-as-investors-await-speech-from-feds-brainard-2016-09-12) after its rally on Friday, with the ICE Dollar Index edging down 0.1% to 95.24.
The U.S. dollar fell against the Taiwan dollar Tuesday, shedding NT$0.010 to close at NT$31.706 as concerns eased over an interest rate hike by the U.S. Federal Reserve, prompting traders to lower their U.S. currency holdings, dealers said.
With both the USA and Japanese central banks holding monetary policy meetings next week, the dollar-yen pair is expected to remain directionless for the time being, traders said.
U.S. stocks racked up their strongest gain in two months on Monday, with the Dow rising 1.3 percent and the S&P 500 gaining 1.5 percent.
The Fed lowered interest rates to near zero in response to the 2007-2009 financial crisis, and has increased them only once since then – in December – given the sluggish pace of the recovery.
Fed Governor Lael Brainard on Monday cautioned against removing support for the USA economy too quickly.
While some investors had speculated that Brainard would switch over to the more hawkish camp, the Fed governor said Monday she wanted to see a stronger trend in USA consumer spending and evidence of rising inflation before the Fed raises rates.
Meanwhile, Atlanta Fed President Dennis Lockhart in a speech to the National Association for Business Economics in Atlanta said he thought the economic data over the past few weeks “warrant.serious discussion of a policy rate increase”.
South Korea’s Kospi rose 0.5 percent and Australian stocks advanced 0.3 percent. The Shanghai Composite index inched back into positive territory, gaining 0.1 percent to 3,023.51. Phone companies also rose and AT&T gained 53 cents, or 1.3 percent, to $40.24.
Even before Friday, the Fed seemed more disposed toward keeping rates on hold this month than raising them.
Hong Kong’s Hang Seng Index rose 0.9% after logging its third-biggest decline of the year on Monday.
Growth should strengthen in the second half of the year, moving toward a 3 percent annualized rate, he said.
Copper climbed off a 12-week low as USA rate hike jitters subsided. Perrigo said it will review Starboard’s comments.
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Brent crude was off 45 cents at $47.56 a barrel, while US crude lost 56 cents to $45.32.
