Dollar Remains Steady After Fed Official's Comments

 
   


 By Hiroyuki Kachi 

 

        The dollar remained steady against the yen and the euro during Asian trading hours Wednesday, with comments by a top Federal Reserve official signaling the central bank is moving closer to raising short-term rates.
        The greenback hit as high as Y124.48 before slightly weakening to Y124.36 around 0450 GMT. That compares with Y124.38 late Tuesday in New York. The U.S. currency was higher against the euro, which fell to $1.0868 midday from $1.0881 overnight.
        The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.09% at 89.14.
        Federal Reserve Bank of Atlanta President Dennis Lockhart, who is a voting member on the Fed's monetary-policy committee, told The Wall Street Journal on Tuesday that the economy is ready for the first increase in short-term interest rates in more than nine years, and that it would take a significant deterioration in the data to convince him not to make a move in September.
        "I don't think Mr. Lockhart himself has changed his stance," said Minori Uchida, head of Tokyo global markets research at Bank of Tokyo-Mitsubishi UFJ.
        Rather, Mr. Uchida said the market has become aware of a September rate increase, especially at a time when investors are trying to look for evidence of "some further improvement in the labor market" as highlighted by the Federal Open Market Committee last week.
        "Investors are now at a time where it is easier for them to raise their expectations," said Mr. Uchida.
        "I thought the possibility of a September rate raise had fallen to 50% following the weakness in the U.S. employment-cost data Friday," last week, said Nomura Securities chief FX strategist Yunosuke Ikeda in a note. But the comments by Mr. Lockhart, who tends to represent the overall consensus of Fed officials, puts the possibility back on the table, he said.
        "Of course, it all depends on the data. But as long as the data don't show a growth in nonfarm payrolls by less than 150,000, that would be interpreted as green light," he said.
        Economists predict that the U.S. will have created 215,000 jobs last month versus 223,000 in June.
        Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
        (END) Dow Jones Newswires

        August 05, 2015 01:15 ET (05:15 GMT)

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