The dollar stood tall in Asian trading on Monday, after Federal Reserve Chair Janet Yellen’s upbeat comments on the US economy and traders raised their bets on an interest rate increase.
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The Dow Jones industrial average .DJI ended up 107.59 points, or 0.58 percent, at 18,502.99.
Spot gold was down 0.3 percent at $1,319.47 an ounce at 0931 GMT, while US gold futures for December delivery were down $4.50 an ounce at $1,322.50. The Nasdaq composite edged up 13.41 points, or 0.3 percent, to 5,232.33.
At the Fed’s annual gathering for global central bankers in Jackson Hole, Wyoming, Yellen said the case for an interest rate hike has strengthened in recent months as the labor market and economy have improved.
Analysts said it’s possible for the Fed to hike interest rates as soon as September. Over the last few months, the Feds have maintained a large uncertainty concerning the issue of a rates hike this year spurring some confusion for investors all over the world, seem to have given a significant amount of clarity to the issue last week after a spate of comments made by senior Feds officials.
“The Sensex returned strong earnings growth trends during past Fed hike cycles and market returns tended to track earnings growth closely”.
US crude futures dropped 1.7 per cent to $46.84 while Brent crude also fell by a similar margin to $49.08.
“It is looking more likely that we will see a rate hike this year, and September is a good possibility”, said Richard Sichel, chief investment officer of Philadelphia Trust Co in Philadelphia.
Herbalife added $2.80, or 4.6 percent, to $63.30 after Icahn said late Friday he had bought an additional 2.3 million shares in the supplements and weight-loss products company, and that he never gave an order to sell his $1 billion stake.
The rupee on Monday resumed substantially lower at 67.14 compared to previous close of 67.06 at the interbank foreign exchange (forex) market on fresh bouts of dollar demand. Greenback climbed 0.13% to $95.60 as of 09:50 GMT, close to Friday’s two-week high of 95.58. Crude oil futures fell about 2 percent on Monday as investors reacted to greater-than-expected Middle East output and a stronger U.S. Dollar. That followed gains of 1.3 per cent on Friday, its biggest one-day advance in nearly seven weeks.
This means that all eyes will be on Friday’s United States jobs figures which, if strong, will clinch the case for an early rate hike, analysts said.
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She did not indicate when the US central bank might raise rates, and euro zone bond yields closed lower on Friday. The yield on the 10-year Treasury note fell to 1.56 percent from 1.63 percent.
