Dismal economic data from the U.S. tempers expectations the Fed will raise rates this month
In Asia, Hong Kong’s stock market led regional gainers with the broad gauge .HSI rising 1 percent as investors hunted for bargains in one of the cheapest equity markets in the region.
But Yellen’s comments helped steady nerves in NY, where all three main indexes ended sharply higher, while the dollar managed to staunch a sell-off after Friday’s two percent fall against the yen and euro.
“There’s clearly a slow turning of sentiment against the dollar”, said Ulf Lindahl, chief executive officer of currency manager A.G. Bisset Associates, who manages more than US$1 billion (RM4.057 billion) from Norwalk, Connecticut.
Even before Yellen spoke, USA interest rates futures implied traders had all but priced out any chance the Fed will raise rates at its policy meeting next week.
“Federal Reserve chair Yellen was cautious in her remarks on the shocking payrolls reading, which reinforced that June is not the month to make a move”.
She did not give any indication of when the central bank would again lift interest rates but said any move would be gradual.
However, a report in the Exchange Rates said, despite the setback, the U.S. currency is projected to strengthen to $1.10 per euro and 115 yen by the end of the year, according to surveys of analysts by Bloomberg. The dollar index .DXY was last down 0.02 percent at 93.887.
While Yellen presented an upbeat view of the USA economy at a speech on Monday, she also suggested lingering uncertainties that may take months to resolve.
The S&P 500 added 2.72 points, or 0.13 percent, to 2,112.13. “Stocks rose after the China trade figures, in a bit of a “risk on” reaction, because imports didn’t fall as much as expected”, said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank in Tokyo. At around 1600 GMT, benchmark oil Brent North Sea crude for delivery in August was US$51.04 a barrel.
US Treasury bond yields headed higher after an initial small fall, and the dollar gained 1.1% to 107.58 yen but was flat against the euro at $1.1360.
She helped markets tentatively put the surprisingly dismal U.S. jobs report behind them, saying one month’s data is not so significant and that the overall jobs market situation has been “quite positive”.
The British pound sharply fluctuated after opinion polls suggested more people were in favour of leaving the European Union, just weeks ahead of a referendum on June 23.
The Dow Jones Industrial Average gained 71 points, or 0.4%, to 17992 and briefly crossed the 18000 mark.
The pan-European STOXX Europe 600 and the FTSEurofirst 300 indexes rose 1.2 per cent and 1.1 per cent respectively, extending the previous session’s slight gains and ending at their highest close since May 31.
DOWNLOAD YOUR FREE DEFINITIVE GOLD GUIDE
The Definitive Gold Guide:
On January 8, 1835, President Andrew Jackson proclaimed that the last installment of our national debt had been paid, and that the United States was debt free! This was the only time in American history that the U.S. had no debt.
Get the Gold Guide free by filling out the form below and we will send you 7 more eBooks FREE, once a week via email.