Dollar Strengthens Ahead of Fed's Lacker

 
Snapshot: 

        Dollar firm; 10-year Treasury yield at 1.959%; U.S. stock futures flat; Nymex crude at $50.13; gold at $1201.59
        -Watch for: No major data scheduled; speech by Fed's Jeffrey Lacker
        News: China's Consumer Inflation Inches Up; U.S. Chides Europe, Japan for Overreliance on Monetary Policy; South Korea Denies Intervention in Currency Markets
        The effect of the ECB's stimulus efforts continued to be felt in European currency markets Friday, with the euro slipping further against the dollar after Thursday's heavy decline.
        At the same time, the dollar has bounced back from a recent soft patch after Wednesday's Federal Reserve minutes, which indicated that some officials still see a June interest-rate increase as a possibility.
        The single currency was 0.2% lower at $1.0645, and is down more than 2% against the dollar this week.
        "A period of weak U.S. data, a strong dollar--none of this currently seems to bother the [Fed] and distract it from its planned normalization of U.S. monetary policy. This is clearly what the market gathered from the last [Fed] minutes," said Commerzbank currency strategist Thu Lan Nguyen.
        The ICE dollar index pitched 0.3% higher to 99.40, closing in on the 100-mark and reaching the highest level in three weeks.
        U.S. Treasurys were unchanged in Europe after a sharp sell-off in the U.S. Thursday on stronger-than-expected jobless data and a weak 30-year bond sale.
        Turnover in Europe was low, though, with a lack of data or Fed official speeches keeping investors on the sidelines.
        At 4.28am ET, the June Treasury contract was 1/32 lower at 128-260 and the 10-year cash yield was 1.959%.
        The European Central Bank continues to pump EUR60 billion a month into debt markets under its stimulus program, driving down bond yields. The German 10-year yield was up slightly at 0.16% having hit a record low of 0.14% on Thursday.
        U.S. stocks were poised for a soft open on Wall Street, with the dollar in the spotlight ahead of a Jeffrey Lacker speech that could shed more light on the Federal Reserve's timing of the first rate hike.
        Futures for the Dow Jones Industrial Average slipped 20 points, or 0.1%, to 17,867, while those for the S&P 500 index lost 1.70 points, or 0.1%, to 2,083.75. Futures for the Nasdaq 100 index gave up 3.75 points, or 0.1%, to 4,395.50.
        Capping off the choppy week, the Fed and its rate-hike consideration are again among the highlights. Richmond Fed President Jeffrey Lacker, who is a voting member of the Federal Open Market Committee this year, will give a speech on the economic outlook in Sarasota at 8.45am ET and investors will closely be watching for hints as to when the central bank might start to tighten policy.
        Mr. Lacker, who is considered one of the most hawkish members of the Fed, said in late March that he sees a "strong" case for a rate hike in June. However, that was before the nonfarm payrolls report for March significantly missed expectations, leaving investors to watch for cues if Lacker's liftoff mood has shifted.
        The minutes from the Fed's March meeting - also held before the disappointing jobs report - showed several central bank officials thought June was an appropriate time for a rate hike.
        Crude-oil futures fell after a week of high volatility, with investors closely following the strength of the dollar and waiting for the latest rig-count data.
        On the New York Mercantile Exchange, light, sweet crude futures for delivery in May fell 66 cents, or 0.3%, to $50.13 a barrel. May Brent crude on London's ICE Futures exchange lost 25 cents, or 0.%, to $57.44 a barrel.
        "The dollar strength is impacting across the board today," said Richard Perry, market analyst at Hantec Markets. "WTI did not really fall yesterday, despite euro and sterling under pressure."
        Gold prices in Europe were higher, boosted by weak U.S. corporate earnings.
        Spot gold was trading up 0.6% at $1,201.59 a troy ounce in morning European trade--having hit a one-week low in the previous session at $1,192.85 an ounce.
        China's Consumer Inflation Inches Up
        China posted another modest rise in consumer inflation in March, giving policymakers room for more aggressive stimulus for a sluggish economy.
        U.S. Chides Europe, Japan for Overreliance on Monetary Policy
        The U.S. Treasury Department, in its semiannual currency report released Thursday, chided Europe and Japan for overreliance on monetary policy and unbalanced growth.
        Nikkei Breaks Above 20000
        Tokyo stocks briefly went above 20000 for the first time since April 2000 in early Friday trading, the latest milestone in the market's bull run.
        South Korea Denies Intervention in Currency Markets
        South Korean officials denied the U.S. Treasury Department's fresh report on Seoul's suspected intervention in currency markets.
        Ruble Hits New High
        The Russian ruble reached its highest level against the dollar since December in early trade as local investors continued to unload foreign currencies.
        Write to paul.larkins@wsj.com
        (END) Dow Jones Newswires
        April 10, 2015 06:20 ET (10:20 GMT)

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