“We’re edging closer towards the point in time where it will be appropriate I think to raise interest rates further”, Dudley, a permanent voting member of the Federal Reserve, said in an interview on Fox Business Network.
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This suggested that traders saw a 55 per cent chance for the Fed to raise rates in December, up from 42 per cent on Monday. The weakening dollar continued to boost materials companies Tuesday, as it could make their products more affordable in markets outside the U.S. Packaging maker WestRock rose 85 cents, or 1.9 percent, to $44.85.
The Nasdaq Composite on Tuesday ended a streak of three straight sessions of all-time closing highs and the other stock benchmarks pulled back from Monday’s records as investors fretted about hawkish statements from Federal Reserve officials. However, data on Tuesday showed US consumer prices were unchanged in July as the cost of gasoline fell for the first time in five months and underlying inflation moderated.
The Fed has a 2.0 percent inflation target and tracks an alternative inflation measure which has been stuck at 1.6 percent since March.
But John Cannally, chief economic strategist for LPL Financial, said the Fed has chosen to let the currency weaken a bit in order to aid US manufacturing and energy companies and other exporters. The Australian dollar went up to 0.7698 dollars from 0.7682 dollars. USD/CAD’s recent fall has been driven both by United States dollar weakness as well as a two-week-long recovery in crude oil prices that has boosted the Canadian dollar.
Asian stock markets were mostly higher Wednesday after Wall Street declined. William Dudley, president of the New York Federal Reserve Bank, made comments that put the possibility of a rate increase by the US central bank on the table.
The drop and partial rebound for the USA dollar on Tuesday prompted the USD/CAD currency pair to hit its major downside target at 1.2800 before bouncing off that key support level and paring its losses. Brent crude, a benchmark used to price global oils, gained 88 cents, or 1.8 percent, to $49.23 a barrel in London.
In China, bullion of 99.99 per cent purity fell 0.2 per cent to 287.50 yuan a gram on the Shanghai Gold Exchange.
Energy companies rose with the price of oil, but stocks have been locked in an up-and-down pattern for more than a week. And factory gate prices rose at their fastest in over two years as the fall in sterling after the vote to leave the European Union pushed up import prices. The precious metal rose 0.5 percent on Tuesday. However, data released today also showed higher-than-expected industrial production, with a 0.7% increase reported for July.
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On the Shanghai Futures Exchange, gold for December delivery lost 0.3 per cent to 288.05 yuan a gram, while silver dropped 0.6 per cent to 4,382 yuan a kilogram. G&K Services advanced $14.85, or 18.1 percent, to $96.98 and Cintas stock gained $6.27, or 5.8 percent, to $113.69.
