Comments from several Fed officials in recent weeks had boosted bets on a rate hike in coming months, but investors have had to scale back their expectations since Friday’s weaker-than-expected USA payrolls report.
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“They’re keeping the rates down so that everything else doesn’t go down”, Trump initially said, seeming to imply he agrees with the policy.
Both members are known for their hawkish stance but attention will most likely focus on George who is a voting member of the FOMC and was the only Fed official to vote against the July decision due to her preference to increase the rate in 25 basis points.
Goldman now sees a 70 percent chance that the USA central bank will raise rates at least once this year, down from 80 percent.
Longer-dated United Kingdom government bonds pared an earlier advance as the Bank of England’s latest attempt to get investors to part with the securities in its quantitative-easing program met with more offers than at a previous operation.
The won rose as much as 1.2 per cent to 1,092.4 per United States dollar, compared with a near 15-month high of 1,091.8 hit on Aug 10. An auction of the tenor achieved a higher-than-estimated price on Tuesday and the bid-to-cover ratio rose from the previous sale.
Williams said the economy was in “good shape”, and he forecast unemployment, now at 4.9 percent, to fall to 4.5 percent in the coming year and inflation to rise to the Fed’s 2 percent target in the next year or two.
The poor data took the chances for a September rate hike off the table and had implications for traders’ bets on the speed with which the USA central bank will raise short-term interest rates in the future, said Fabian Eliasson, vice president for currency sales at Mizuho Corporate Bank in NY.
Meanwhile, investors would also be monitoring the outcome of Bank Negara Malaysia’s policy meeting today, which would determine the direction of country’s interest rates. “It left a lot of people guessing”.
Spectra Energy jumped 11.7 percent, giving the energy index its biggest boost, after Enbridge agreed to buy the company for $28 billion.
The dollar was down one percent against the won, while Australia’s dollar added 0.4 percent, Indonesia’s rupiah climbed 0.3 percent and the Turkish lira was up 0.6 percent.
The Stoxx Europe 600 index erased gains after the US economic report.
If weather forecasters held a similar annual meeting about the nation’s future weather patterns, Yellen’s comments would be similar to Al Roker stepping to the podium and saying, “I’m not sure when or how much but it’s going to rain.at some point. that’s what the current weather situation is telling us”.
The dollar was last down 0.6% against the yen at Yen103.3750.
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Gold futures for December delivery posted the longest rally since August 2. That probability rises to more than 50% in December. Benchmark U.S. crude oil gained 88 cents to $45.32 a barrel in electronic trading on the New York Mercantile Exchange. WTI for November delivery closed at discount to Brent for the same month. Brent crude, the benchmark for worldwide oil prices, fell 37 cents to $46.46 a barrel.
