For her part, Federal Reserve Chairwoman Janet Yellen has not praised negative interest rates and has yet to show any hint that she would pursue that strategy. He said the USA job market is almost at full strength and the pace of Fed rate increases will depend on how well the economy is doing.
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India will not be immune from the impact of the potential September rate hike, but is better placed than most of its rivals at this juncture, a forex dealer said.
The US dollar traded mixed against other major currencies as investors were digesting the recent remarks by Federal Reserve Janet Yellen and newly-released economic data from the country.
Yellen said in Jackson Hole on Friday that the case for tightening policy had strengthened.
The dollar index.DXY rose 0.11 percent, trading at more than a two-week high, while oil prices slipped more than 1.5 percent.
“A soft number would be no surprise after two unusually strong months, which would put paid to the chance of a move in September”.
In the meantime, the prospect of lingering uncertainty pushed down stocks in the eurozone, where both Frankfurt and Paris took their lead from weakness across Asian markets.
Markets are expected to be quiet today with the United Kingdom closed for a bank holiday.
CURRENCIES: As currencies tend to rise as interest rates increase, the dollar jumped on Yellen’s comments.
A weaker yen boosted Japan’s exporters, sending the Nikkei stock index 2.3 percent higher at the close.
Apple fell 1.87 percent to $104.92 in heavy premarket trading after European Union antitrust regulators ordered the iPhone maker to pay $14.5 billion to the Irish government, ruling that a scheme to route profits through Ireland was illegal state aid. The EUR/USD traded 1.1174, down 0.0017 or -0.16%.
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 US dollar weighed on commodities.
Oil prices fell, with benchmark Brent crude falling below $49 a barrel, pressured by high output from Middle East Opec members and as a stronger U.S. dollar weighed on commodities.
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In that context, short-term Treasurys, which are most sensitive to changes in the Fed-funds rate, would be most vulnerable to a potential selloff and soaring yields if Friday’s official jobs report beats expectations, he added.
