Tokyo-Tokyo shares rose cautiously in mid-afternoon trade on Tuesday as the market determined the impact of comments by Federal Reserve Chair Janet Yellen, who said that any U.S. interest rate hike would be gradual.
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At 5pm, the ringgit was quoted at 4.0550/0610 against the U.S. dollar from 4.0950/0020 on Monday.
The Fed raised interest rates by 0.25 percentage points for the first time in nine years last December and has left them unchanged since.
“You may recall that rate hike expectations surged in the wake of the release of the minutes from the April [Federal Open Market Committee] minutes on May 18 – supported by subsequent FedSpeak – putting gold under pressure.” said Peter Grant, chief market analyst with USAGOLD.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.26% at 93.59, the lowest since May 5.
However, the healthcare index (.SPXHC) tumbled 0.75 percent, led by Biogen (BIIB.O) and Alexion (ALXN.O), both of which reported that their drugs failed in trials. Asian stock markets mostly rallied on Tuesday as investors took heart fro…
The Dow Jones industrial average .DJI rose 17.95 points, or 0.1 percent, to close at 17,938.28, the S&P 500 .SPX gained 2.72 points, or 0.13 percent, to 2,112.13, while the Nasdaq Composite .IXIC dropped 6.96 points, or 0.14 percent, to 4,961.75.
But she backed away from previous Fed hints for a rate increase in June or July, only saying that tighter monetary policy should come gradually.
The Australian dollar changed hands at $0.7365, below Monday’s four-week peak of $0.7392 ahead of the Reserve Bank of Australia’s policy decision at 0430 GMT.
ALL ABOUT YELLEN: Traders have taken their cue from a speech Monday by Yellen in which she appeared to rule out an interest rate increase at next week’s meeting of the central bank’s policymaking body.
U.S. West Texas Intermediate (WTI) crude stood firm in Asia at $50.39 per barrel, after rising 2.2 percent on Monday, its largest gain in three weeks. Australia’s S&P/ASX 200 rose 0.2 percent to 5,371.00. The yields have risen from two-month lows of 1.697 percent hit on Friday.
And a key question is whether USA demand can remain strong “amid fairly considerable global bumpiness”, said Yellen, adding a particular concern is weakness in investment spending by US companies, a slowdown that she said she thinks will prove temporary. Brent crude, which is used to price worldwide oils, added 72 cents to $51.27 a barrel in London.
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Elsewhere oil prices held firm on crippling attacks on Nigeria’s oil industry and fresh draws in USA crude stockpiles.
