Dol­lar halts slide on Fed rate hike talk

The Myanmar Times - - International Business -

THE dol­lar halted its slide in Asia trade yes­ter­day af­ter a se­nior US cen­tral banker said overnight that an in­ter­est rate raise could come as early as next month.

Wil­liam Dud­ley, the in­flu­en­tial head of the Fed­eral Re­serve’s New York branch, un­ex­pect­edly hinted that a rate hike was pos­si­ble as early as Septem­ber.

An­a­lysts said the com­ments from Mr Dud­ley – who re­marked that Wall Street in­vestors were too “com­pla­cent” about the prospect of higher bor­row­ing costs over the next year–halted the US unit's fall in Asia.

The greenback had briefly dived un­der the 100 level against the safe­haven Ja­panese cur­rency in New York for only the sec­ond time this year, touch­ing as low as 99.54 at one stage.

“While Dud­ley was at least able to stem the bleed­ing for the dol­lar in­dex, price ac­tion is not en­cour­ag­ing for the dol­lar near-term,” Sean Cal­low, a Syd­ney-based se­nior for­eign-ex­change strate­gist at West­pac Banking Corp, told Bloomberg News.

“Still, so long as a rate hike seems more likely than not as the Fed’s next move, we wouldn’t get su­per bear­ish on the dol­lar.”

In Tokyo, the greenback climbed to 100.57 yen from 100.30 yen in New York as a Ja­panese of­fi­cial hinted at a pos­si­ble bid to weaken the yen.

Ja­pan’s top cur­rency of­fi­cial, Masat­sugu Asakawa, said yes­ter­day that Tokyo could re­spond to the “ex­ces­sive moves” in forex mar­kets.

How­ever, an­a­lysts said the bid to talk down Ja­pan’s cur­rency might be wear­ing thin, while a mar­ket in­ter­ven­tion threat­ens to put Ja­pan on a col­li­sion course with its G7 coun­ter­parts, which have pledged not to in­ter­fere with ex­change rates.

“Asakawa is once again dish­ing out the well-worn Ja­panese pol­i­cy­mak­ers ver­bal in­ter­ven­tion, ‘moves are rough’, rhetoric,” Stephen Innes, se­nior trader at forex firm OANDA, said in a com­men­tary. –

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