NEW YORK, Aug 24 (Reuters) – The dollar rose on Wednesday in thin trading, helped by data the previous day showing a surge in us new home sales, but gains were capped by uncertainty ahead of Federal Reserve Chair Janet Yellen’s speech at a central bankers’ conference on Friday.
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With speculation growing that USA interest rates could rise by the end of the year, Yellen’s comments at a global central bankers meeting in Jackson Hole Friday will be scoured for forward guidance on USA central bank policy.
Recent hawkish comments from Fed Vice Chairman Stanley Fischer and New York Fed President William Dudley have raised expectations that Yellen might shift to a less cautious stance, though some investors remain doubtful.
Yellen’s speech will be closely monitored by the financial markets for clues about the future path of United States monetary policy.
The Dow Jones industrial average opened down 28 points, or 0.15%.
Declining issues outnumbered advancing ones on the NYSE by 1,816 to 968. “As Japan’s recent monetary policy and fiscal policy changes have failed to meet market expectations, people expect the USA economic outlook to be the main catalysts for Japanese stocks for now”.
The U.S. National Association of Realtors said existing home sales decreased by 3.2% in July to 5.39 million units from the 5.57 million units in June.
The broader Topix dropped 0.3 percent to 1,302.68 and the JPX-Nikkei Index 400 declined 0.3 percent to 11,706.69. A move in the differential by 0.1 percentage point in favour of the dollar could push the pound 1.5 per cent lower, the research shows.
The dollar index, which tracks the greenback against a basket of six major rivals, was down 0.1% at 94.695.
Meanwhile, the Nasdaq Composite Index traded down 10 points, or about 0.2%, at 5,254.
The technology index, which propelled the Nasdaq to a intraday record on Tuesday, was down 0.35 per cent and the biggest drag among the 10 S&P sectors.
The fall in gold prices hit FTSE-listed producers Randgold Resources, which fell 4.7 per cent to 7,640p, and Fresnillo, which dropped 3.7 per cent to 1,767.4p.
“It is fairly quiet on the volumes front, which means when something does go through – even if it is in small size – you are prone to more volatility or jumpy markets”, said Mazen Issa, a senior foreign-exchange strategist at Toronto-Dominion Bank in NY, who sees the outlook for the dollar skewed toward strengthening.
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NY gold futures for December delivery settled down 1.2% at US$1330 an ounce.
