Oil prices rose to eight-months highs, up for a third consecutive session on supply worries, and USA bonds held steady before a 10-year note auction. The MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.32 percent.
Advertisement
This caused the US dollar.DXY to fall to a five-week low against a basket of currencies.
The euro edged up 0.1 percent to US$1.1360, moving back towards the previous session’s almost one-month high of US$1.1393.
Singapore’s Straits Times Index extended gains into a fifth consecutive session, led by oil and gas stocks as crude prices jumped to their highest level in eight months.
Investors have nearly priced out the chance of a rate increase at the US Fed’s June 14-15 policy review, and see the likelihood of a July rate hike reduced to around 26% since disappointing jobs data last week and comments by Fed Chair Janet Yellen on Monday. “While the message Yellen wants to across is that she still wants to move rates higher, the timing of subsequent rate hikes is murky”. The metal, which slid more than 6% in May, has risen about 2.8% so far this month on reduced expectations for an early rate hike.
Last December, the Federal Reserve lifted the federal funds rate by a quarter percentage point after keeping it close to zero for seven years. The dollar index .DXY was last down 0.02 percent at 93.887.
In other foreign exchange trade, Australia’s dollar was up 1.1 percent against the greenback, given extra impetus by the central bank’s decision to hold off cutting interest rates and the fact it gave little indication of any such move down the line.
USA stocks rose as declines in the dollar lifted some commodity-related shares and boosted the outlook for multinationals.
Yellen, the Fed’s chairwoman, said a few weeks ago that she expected the Fed to raise its benchmark interest rate “in the coming months”, but she omitted those words from a Monday speech, indicating the reported weakness of job creation in May has caused the Fed to rethink its plans. Spot gold prices XAU= were down 0.1 percent to $1,243.57 an ounce, still near a 2-week high.
A picture illustration of United States dollar, Swiss Franc, British pound and Euro bank notes, taken in Warsaw January 26, 2011.
Brent crude LCOc1 settled up 89 cents, or 1.76 percent at $51.44 a barrel, while USA crude CLc1 settled up 67 cents, or 1.35 percent, at $50.36.
US equities reacted positively to her speech, with the Dow Jones industrial average (Dow Jones Global Indexes:.DJI) rising more than 100 points.
Advertisement
Friday’s news that the USA economy created less than a quarter of the jobs expected in May scythed expectations for a rate hike in June or July – as had been strongly hinted by the Fed – and caught traders off-guard, fuelling uncertainty.
