Dollar edges up vs euro, weighing on gold * Friday’s USA payrolls data hotly anticipated * GRAPHIC-2016 asset returns: reut.rs/1WAiOSC (Updates prices, adds Fischer) By Jan Harvey LONDON, Aug 30 (Reuters) – Gold fell on Tuesday after Federal Reserve officials sounded a hawkish note on interest rates, boosting the dollar, while attention turned to US payrolls data this week for further clues on the pace of rate hikes.
Advertisement
Meanwhile, the German stock index DAX Index traded 1.03 percent higher at 10,653 by 09:30 GMT.
The Dow Jones industrial average .DJI ended up 107.59 points, or 0.58 percent, at 18,502.99.
The S&P 500 added 12.87 points, or 0.59 per cent, to 2,181.91.
Koichi Hamada, an adviser to Prime Minister Shinzo Abe, said the Bank of Japan could consider buying foreign bonds as an option to weaken the yen, if government intervention in the currency market is deemed by the United States to be exchange rate manipulation. The Nasdaq Composite .IXIC ended up 13.41 points, or 0.26 percent, at 5,232.33.
The employment report is expected to show an increase of 180,000 jobs in August, according to the median estimate of 89 economists polled by Reuters, below the better-than-expected 255,000 additions in July and 292,000 gains in June. Asked on CNBC whether a rate hike in September and more than one policy tightening before year-end should be expected, Fischer said Yellen’s comments were “consistent with answering yes” to both questions, albeit still data-dependent. “While the move towards another Fed rate hike will likely cause bouts of consternation in investment markets I don’t see the same degree of uncertainty that we saw around last year’s Fed rate hike”, Shane Oliver, head of investment strategy at AMP Capital in Sydney, wrote in a note. The euro was steady at $1.1187.
MSCI’s broadest index of Asia-Pacific shares outside Japan .miapj0000pus extended losses to 1 percent. USA 30-year Treasury bond yields also fell, with their prices rising more than a full point. The pace of rate hikes is heavily dependent on USA economic data.
Oil prices settled down more than 1 percent, ending two consecutive days of gains, pressured by high output from Middle East OPEC members and as a firmer USA dollar weighed on commodities. Global benchmark Brent crude also retreated 1.1 percent to $49.39.
Advertisement
“While we see high probability of some 80 to 90 percent of a return to $39 WTI, we also feel that achievement of this objective could still be some four to five weeks away”, said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates. USA crude futures fell 1.1 percent to $47.10.
