The dollar rose to levels near ¥103.30 in Tokyo trading on Wednesday, on the back of growing expectations the U.S. Federal Reserve will carry out an interest rate hike as early as next month.
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An upbeat nonfarm payrolls report on Friday would reinforce the view that a US rate hike may be on the cards, after Fed officials sounded a hawkish note at a meeting last weekend. Sentiment for the greenback was helped overnight by figures showing United States consumer confidence rose more than expected this month to the highest since September a year ago, while currencies tied to raw materials, such as the kiwi, retreated as CRB Index of commonly traded commodities fell to a two-week low.
USA gold futures were up 0.1 percent at $1,312.90.
Investors are now looking to Friday’s nonfarm payrolls report to shed further light on the strength of the US economy and the timing of a rate hike.
S&P 500 financials closed at their highest level since early December, right before the Fed raised interest rates for the first time in almost 10 years.
Nasdaq 100 e-minis were down 8.5 points, or 0.18 percent, on volume of 18,989 contracts.
Hawkish comments on Friday by Fed Chair Janet Yellen and Vice Chair Stanley Fischer increased expectations the US central bank could hike at its September policy meeting, though most investors and economists view a single increase at the December meeting as more likely. Platinum was up 0.2 percent at $1,050, having touched an eight-week low of $1,043.20 on Wednesday.
In China, bullion of 99.99 percent purity fell 0.4 percent to 282.80 yuan a gram ($1,316.58 an ounce) on the Shanghai Gold Exchange.
In Europe, the pan-European Stoxx Europe 600 index rose half a percent to hit a two-week high on Tuesday, as investors lapped up banking stocks on expectations they will benefit from higher interest rates.
Oil prices fell for a second straight day in response to the dollar’s strength, but the downside was limited by production suspensions in the US Gulf, due to an expected tropical storm.
Brent crude futures LCOc1 were up 6 cents at $49.32 a barrel, while USA crude CLc1 added 11 cents to $47.09.
The kiwi traded at 72.49 U.S. cents as at 8am in Wellington from 72.51 cents late yesterday.
Yields on thirty-year securities dropped seven basis points, the most in about four weeks, to 2.21%, amid month-end purchasing by funds to match duration benchmarks. “That’s very consistent with the price action that we’re seeing: that dollar/yen is the dollar pair that is exhibiting the greatest sensitivity to Jackson Hole”.
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US Treasury yields were little changed as traders awaited the US jobs data.
