An imminent U.S. interest rate hike kept the U.S. Dollar (CURRENCY:USD) steady near its two-month high against global currencies. Though the dollar traded stronger against Yen during early hours today, the outlook for the latter improved on better economic data.
Yellen reiterates hawkish outlook
Federal Reserve Chair Janet Yellen confirmed rate hike expectations after she said that the economy is prepared for tighter monetary regimen given the uptick in labor markets and economic momentum. In Asian hours, USD/JPY (USDJPY) fell 0.17% to 110.92. In other currencies, EUR/USD (EURUSD) slipped 0.08% to 1.1130 while GBP/USD (GBPUSD) plunged steeply by 0.42% to 1.4578.
Asia up, Europe edgy
Asian equities closed higher today as Japan’s better-than-expected economic performance in April boosted sentiment. At the same time, growing speculations that 2017 sales tax hike could push back to 2019 also added to optimism. Nikkei 225 (INDEXNIKKEI:NI225) surged 0.98% to 17,234.98 while Shanghai SE Composite Index closed 3.34% higher at 2,916.62, recording its best session since February.
Markets in Europe were nervous ahead of key Eurozone inflation data and jobs report. Meanwhile, Germany’s retail sales dipped 0.9% month-on-month in April, which adds up to its 1.4% decline in March. DAX (INDEXDB:DAX) shed 0.24% to 10308.74 by midday.
Oil and the corresponding iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) prices traded higher after analysts upped the commodity’s price forecast on the back of easing supplies. A survey from the Wall Street Journal showed that consensus price forecast for Brent Crude in 2016 stands at an average of $43 per barrel, up from $41 in April. Similarly, price projection for West Texas Intermediate (WTI) Crude oil has been increased to $41 a barrel for 2016. Most analysts reiterated that oil price trajectory will be positive in the second half of the year. During early European hours, Brent Crude was trading 0.58% down at $49.47 while WTI gained 0.30% to $49.48.