Wall Street shares also retreated from record highs, with the S&P 500 losing 0.55 percent.
Advertisement
MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.05 percent while Japan’s Nikkei rose 0.4 percent, paring some of Tuesday’s sharp losses.
Mr Dudley, a permanent voter on rates and a close ally of Fed Chair Janet Yellen, gave the market-moving interview nine days before an annual meeting of top central bankers in Jackson Hole, Wyoming, a venue the Fed often uses to telegraph policy plans.
“I would not rule out September”.
“[Dudley’s] message was clear; the market is far too complacent about the rate increase”, said Naeem Aslam, chief market analyst at Think Markets, in a note.
He said that developments surrounding a USA rate hike will likely set the direction of the market for the moment, noting that comments by Fed officials will continue to be watched closely by investors over the next few weeks.
Data released on Tuesday lent some support to their views, with USA industrial production and housing starts expanding in July, although consumer prices were unchanged from June, following two straight monthly increases of 0.2 percent.
Currency markets will seek fresh direction from comments expected from St. Louis Fed President James Bullard and the release of the Fed’s July policy meeting minutes later in the session.
The US consumer price index increased 0.8 percent in July, from a year ago, still well below the Fed’s 2 percent target.
Investors are still betting rates will hold at ultralow levels for quite some time, with Fed-fund futures pointing to a less than 50% chance of a rate rise by the end of the year, according to CME Group.
The dollar hit its lowest against the yen, the euro and the Swiss franc since June 24, the day after Britain voted to exit the European Union. The Australian and New Zealand dollars, both strong beneficiaries of the dollar selling last week, lost 0.3 percent each to $0.7672and $0.7260 respectively.
“As the world economy is slowing down, many countries now need a cheaper currency to support share prices”. It also hit a three-year low of 87.245 pence per euro on Tuesday after United Kingdom inflation came in stronger than expected. Employment surged in June and July, while on Tuesday data showed solid gains in industrial output and home building in the world’s largest economy. It climbed 0.3 per cent to 76.72 USA cents against the Australian dollar and was little changed at US$1.3040 versus the pound. Against the euro, it strengthened to 86.51 pence per euro after having hit a three-year low of 87.245 pence on Tuesday.
Markets are looking towards today’s EIA report on inventories after preliminary data from the American Petroleum Institute showed a surprise build in USA gasoline stocks.
Advertisement
In Commodities Markets oil prices fell away from 5-week highs early on Wednesday, as analysts doubted possible producer talks to rein in ballooning oversupply would be successful.
