She said as economy and the labor market improved the case for an interest rate hike has strengthened in recent months.
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Selling of the dollar by South Korean exporters should limit the won’s decline amid the USA currency’s renewed strength and as the end of the month approaches, Ha Keong Hyeong, a Seoul-based economist at Shinhan Investment Corp., wrote in a note Monday.
USA stocks rose, halting the longest slide since June, as an increase in consumer spending last month bolstered confidence in the economy and a drop in Treasury yields sparked demand for equities with rates of dividend payouts. The Bank of Japan will have relished the 1.3% gain in the USD/JPY, its biggest one day increase since 12 July. Seoul and Singapore were each down 0.5 percent. The won fell 1 percent to 1,124.43 per dollar after hitting 1,128.48, the lowest level in a week and the biggest drop since August 17.
Although U.S. government data earlier on Friday showed sluggish economic growth in the second quarter, Yellen said a lot of new jobs were being created and economic growth would likely continue at a moderate pace.
Despite a chorus of hawkish comments from Fed officials in recent sessions, currency speculators had trimmed their bets on the USA unit for a fourth straight week through the week ended August 23, reducing their net dollar-long positions to their lowest level since early July.
Monday’s data offered “more evidence that can be used for either side of the rate-hike debate”, said James Kochan, chief fixed-income strategist at Wells Fargo Funds Management, in a phone interview. The market is now pricing a 42 percent chance of a September hike and a 64 percent chance of a move in December but if non-farm payrolls are strong “then September will need to get repriced a little bit I would have thought”, he said.
MSCI’s broadest index of Asia-Pacific shares outside Japan slid 0.7 percent.
Insurers staged a rally as higher U.S. rates would allow them to reap yield gains from their investments in USA bonds, while their domestic stock portfolio would also benefit from Nikkei’s uptick. Please see our terms of service for more information. The U.S. currency gave up gains soon after Yellen spoke as she gave no indication that a rate hike was imminent, but rebounded as traders reassessed her words, and after Fed Vice Chair Fischer said the Fed was still on track to lift rates this year.
China’s CSI 300 index and the Shanghai Composite slipped 0.2 per cent. Hong Kong’s Hang Seng shed 0.4 per cent.
Higher-yielding, or riskier, currencies were also hit, with South Korea’s won losing 0.8 percent and the Indonesian rupiah off 0.5 percent, while Malaysia’s ringgit shed 0.7 percent.
On Monday morning, the kiwi fell to 95.49 Australian cents from A95.60c on Friday and fell to 4.8157 yuan from 4.8856 yuan.
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West Texas Intermediate fell 1.2 percent to $47.05 and Brent shed 1.1 percent to $49.37. This clearly indicates the tilt at Federal Reserve towards a stronger Dollar, which, according to their viewpoint, will bolster the economy. It extended those gains by 0.1 per cent to 101.99 yen early on Monday.
