Published: Sat, August 20, 2016
Economy | By Melissa Porter

Fed's Williams Advocates Rate Hike

Several officials wanted to delay the rate increase until they see a clear indicator that inflation would jump to the Fed's two percent target, while for others, the US economy was close to achieving a full recovery on employment and a rate hike may soon be necessary to prevent the economy from overheating. Benchmarks in New Zealand and the Philippines also rose.

Bond prices fell yesterday after a couple of hawkish comments by the Fed officials, who raised the possibility that the Fed may increase interest rates in September.

US stocks are opening slightly lower Wednesday with phone companies and utilities continuing to take the biggest losses.

"They did indicate a better economy, and clearly the Fed is slowly moving towards another rate hike", said Ethan Harris, head of global economics research at Bank of America Merrill Lynch, in an interview on Bloomberg Television.

The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.58 percent at 94.170.DXY after touching a almost eight-week low of 94.141. But they did not indicate when they would likely raise rates.

Retailers traded on earnings reports. Exports sank 14 percent from a year earlier while imports plunged 25 percent in a sign of persistent weak domestic demand. The dollar also slipped to 99.66 yen earlier, or a hair above Tuesday's more than seven-week low of 99.53 yen.

Williams on Thursday told reporters that despite his call for a longer-term rethink, monetary policy must for now be set based on current goals, including full employment and a target of 2-percent inflation.

NEW YORK - Target Corp. cut its profit forecast and a key sales outlook Wednesday as it saw fewer customers in its stores and acknowledged it didn't push the second part of its "Expect More, Pay Less" slogan.

The euro was up 0.32 percent against the dollar at $1.1322.

The dollar wallowed close to eight-week lows against the euro in Asian trade on Friday, poised for weekly losses, after minutes of the U.S. Federal Reserve's July meeting revealed central bank policymakers were in no hurry to hike rates.

Spot silver was down 2.19% at 19.30 an ounce, while platinum inched lower at 1,111.24. The contract climbed 21 cents on Wednesday. However, crude remained near two-month highs with Brent sitting above $50 a barrel for the first time in five weeks following a surge in prices on Thursday.

"A USD dollar off its worst levels has offered Japan's Nikkei and its exporters some respite via a slight pullback in the Yen, which is managing to hold above the all-important 100 mark versus the greenback", said analysts Mike van Dulken and Augustin Eden at Accendo Markets. It jumped 62 cents the previous session to $49.85.

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