Asian stocks reversed gains amid the highest volatility in two months as investors assessed the outlook for US monetary policy and crude oil retreated. Anadarko stock sank $1.12, or 1.9 percent, to $56.67 and Freeport-McMoRan fell 68 cents, or 6.1 percent, to $10.40. The most anticipated had been Federal Reserve Governor Lael Brainard, a noted policy dove whom some investors had thought might signal a change in her stance, which in turn may have signaled a willingness for the FOMC to raise rates as early as next week. Sterling initially declined against the dollar on Thursday, after the Bank of England left interest rates at their record lows and indicated that it would cut them further later this year but reversed course after weak US retail sales data boosted Sterling.
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Still, the dollar later received some support from buying to cover short positions, as shares resumed their ascent.
In a speech on Monday, Brainard says economic progress continues in the US, but the Fed would be wise to continue keeping policy loose.
Fed Governor Lael Brainard on Monday cautioned against removing support for the USA economy too quickly. Comments last Friday from Fed rate-setter Eric Rosengren had stoked expectations of a rate hike as soon as next week, prompting big losses in global stock markets. That was seen as a sign the Fed will refrain from raising rates at a meeting next week. Benchmark New York crude was down 6 cents at $44.83 a barrel while the worldwide standard, Brent, fell 33 cents to $46.77 a barrel. “We still have that conviction that the dollar will rally on the back of rate hikes and see the USA economy improving in the second half”.
GBP/USD is supported in the range of 1.3134 and now trading at 1.3240 levels. But Australia’s S&P/ASX 200 lost 0.2 percent to 5,240.34 and the Shanghai Composite index fell 0.3 percent to 3,012.84.
The Labor Department also is due to release United States consumer price index data for August on September 16. US stocks closed mixed as energy shares declined on the back of low oil prices and ahead of FOMC meeting scheduled next week.
The Australian dollar touched a almost seven-week low against the greenback of $0.7443, while the New Zealand dollar hit a more than one-week low of $0.7235.
Meanwhile, investors also kept a close eye on the Fed’s September policy meeting.
In other energy trading, wholesale gasoline lost 1 cent to $1.38 a gallon. Dow futures and the broader S&P 500 futures are expected to open 0.6 percent lower.
German 10-year government bond yields, the benchmark or euro zone borrowing costs, fell 1.4 basis points to 0.03 percent, having turned positive on Friday for the first time since Britain’s June 23 vote to leave the European Union.
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The U.S. dollar bought 102.72 Japanese yen, higher than 101.84 yen of the previous session. Brent crude, the benchmark for worldwide oil prices, rose 35 cents to $47.45 a barrel in London. Asian stocks mostly rallied.
