Fed Vice Chairman Stanley Fischer said early on Tuesday that it is impossible to say whether the next Interest Ratehike would be “one and done”, according to media reports.
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But on Friday, at the Fed’s yearly assembly for global central bankers in Jackson Hole, Wyoming, Fed Chair Janet Yellen gave one of the clearest indicators that a rate rise was probably round the corner.
He told Bloomberg TV that the USA job market was close to full strength and added the economy had withstood the challenge of a strong dollar.
“On Friday afternoon, gold initially reacted to the speech by Fed Chairwoman Yellen at Jackson Hole by surging above $1,340, but was unable to sustain this level, and ended trading in negative territory”, Commerzbank said.
“After a week of guessing, Yellen left little to the imagination when she stated that the case of a Fed rate hike had strengthened, but remained very much data dependent”, said Stephen Innes, senior trader at forex firm OANDA Asia Pacific.
Analysts said attention will now be focused on key United States jobs data, due to be released Friday, which, if strong, could help clinch the case for an early rate hike.
Most Asian currencies markets slipped after Fed chair Janet Yellen indicated that an interest rate increase remains on the cards for this year.
Supporting the case for higher rates was a report that showed consumer spending, which accounts for more than two-thirds of US economic activity, rose for the fourth straight month in July. But with the economy barely growing and inflation sliding further away from the Bank of Japan’s 2 percent target, most economists polled by Reuters expect the bank to ease further next month when it conducts a comprehensive review of the effects of its stimulus programme.
Foreign portfolio investors (FPIs) bought shares worth Rs 286.52 crore on a net basis on Monday, provisional exchange data showed.
South Korea’s Kospi Index lost 0.5%.
It kept descending, weighed down by early fall in local equities and strengthening dollar value to hit an intraday low of 67.22, before ending at 67.18, revealing a loss of 12 paise, or 0.18 per cent.
The rupee is down 1.5% till date this year, while foreign institutional investors (FIIs) have bought $5.78 billion in equity and sold $1.19 billion in debt markets. September U.S. Dollar Index futures rallied to 95.69, up 0.148 or +0.15%. A stronger dollar usually leads to lower demand for gold because it makes the precious metal more expensive for foreign traders.
Oil prices settled down more than 1 percent, ending two consecutive days of gains, pressured by high output from Middle East OPEC members and as a firmer USA dollar weighed on commodities.
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Europe’s broad FTSEurofirst 300 index .FTEU3 closed down 0.17 percent, at 1,350.4.
