“The market believes that Yellen will not give any signal about the timing of the Fed’s next rate rise at Jackson Hole”, said Mansoor Mohi-uddin, a strategist at Royal Bank of Scotland Group Plc in Singapore.
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The number of regional Federal Reserve banks calling on the central bank to raise the rate it charges commercial banks for emergency loans rose to eight in July, minutes from the Fed’s discount rate meeting released on Tuesday showed.
The Australian dollar was a last trading at $0.7614, from $0.7628 early, having recovered from a two-week low of $0.7584 touched on Monday.
Investors in the currency markets are not convinced that the Fed will raise interest rates before December this year after seeing a string of negative economic data, including a weak economic expansion and muted inflation for the month of July. It hit a two-month high of $51.22 on Friday.
US stocks moved higher in sympathy with shares in Europe, which got a boost from the latest reading from a closely watched purchasing managers index, or PMI, which showed a slight rise but enough to top economists’ expectations. On the Nasdaq, 1,900 issues rose and 846 fell. The Canadian dollar last traded at C$1.2916 to the greenback, or 77.46 USA cents, stronger than Monday’s close of C$1.2950, or 77.22 U.S.
The metal is up 27 percent this year as the Fed held off from further monetary tightening. “However, Janet Yellen’s comments from previous year on “global concerns” have not been alleviated, and that’s a big reason rates will not rise anytime soon”.
European shares advanced on Tuesday, with house builders leading the market higher and mining companies rebounding from their declines the day before.
The Dow Jones industrial average rose 43.76 points, or 0.24%, to 18,573.18, the S&P 500 gained 8.34 points, or 0.38%, to 2,190.98 and the Nasdaq Composite added 25.05 points, or 0.48%, to 5,269.65.
“While we do think that Janet Yellen may point the Fed in a more hawkish direction on Friday, there is likely to be continued ambiguity surrounding future United States monetary policy”, it said in a note today.
The S&P 500 was up 9.57 points, or 0.44%, at 2,192.21, just 1 point away from its all-time intraday high.
Benchmark 10-year notes ended down 4/32 in price to yield 1.55 percent, up from 1.54 percent on Monday.
Prices retreated from two-month highs on worries about burgeoning Chinese fuel exports, more Iraqi and Nigerian crude shipments and a rising USA oil rig count.
The U.S. dollar fell broadly against the major currencies as traders await more clear signals of interest directions from the Federal Reserve officials later this week.
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The euro rose to US$1.1330 from US$1.1322, while edging down to 113.55 yen from 113.58 yen.
