The dollar index, which measures the currency against a basket of six majors, rose as high as to 96.255, its highest since August 9, before falling back to 96.005, marginally down on the day. The advances helped Wall Street snap a three-day losing streak.
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Friday’s nonfarm report for August, as well as other data, could reinforce hawkish messages from Yellen and other Fed officials.
The dollar rose to a three-week high against the yen on Monday after senior Federal Reserve officials bolstered expectations that USA interest rates will rise soon.
Wong said the ANZ Business Outlook for August, due out today, is likely to be the main piece of important data for the market but the main event this week is still non-farm payrolls data due out in the USA on Friday, which are expected to show the world’s largest economy added 180,000 jobs in August.
Mounting expectations for a Fed hike this year boosted financial stocks on both sides of the Atlantic, limiting losses in USA shares and helping the pan-European STOXX 600 hit its highest level since mid-August. British markets were closed for a holiday.
US economic data on Monday showed consumer spending increased for a fourth straight month, pointing to a pickup in growth that could pave the way for the Fed to raise interest rates later this year. South Korea’s Kospi added 0.4 percent to 2,039.74.
The Dow Jones industrial average closed down 48.69 points, or 0.26 per cent, at 18,454.3. The Nasdaq Composite Index was down 12.12 points, or 0.23 per cent, to 5,220.21. Platinum was up 0.7 per cent at $1,058.90. USA 30-year Treasury bond yields also fell, with their prices rising more than a full point.
The euro EURUSD, +0.3316% also turned higher, buying $1.1189 in recent trade, compared with $1.1161.
“Even though it looks like the Fed may tighten in September and will probably tighten by December, people are still looking at Treasuries saying, ‘I like those yields, ‘” said Evercore ISI strategist Stan Shipley. USA crude settled down 63 United States cents, or 1.34 per cent, at $US46.35 per barrel.
Despite the chorus of hawkish comments from Fed officials in recent days, speculators trimmed bets on the dollar for a fourth straight week in the week ended August 23, reducing net dollar-long positions to their lowest since early July.
Spot gold touched its lowest since June 24 at $1,303.95 an ounce earlier and was down 0.2 percent at $1,306.21 by 1001 GMT.
S&P 500 e-minis were down 1 point, or 0.05 percent, with 109,032 contracts traded.
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Brent crude settled down 89 U.S. cents, or 1.81 per cent, at $US48.37 per barrel.
