Dollar steady after soft United States data, Fed's Dudley awaited for cues

The U.S. dollar rose against a basket of major currencies, helped by comments from New York Federal Reserve President William Dudley suggesting the central bank remained on track to raise U.S. interest rates further despite recent disappointing inflation data.

"In the wake of Friday's weak USA data, Dudley could provide insight into whether the Fed is still poised to continue normalising monetary policy", said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.

At the Asian market open 07:00 (AEST), the Australian dollar was trading at 75.94 USA cents, down from 76.11 US cents on Monday. "With buying interest returning to technology shares in the USA, it's likely for Japanese counterparts to attract investors, while higher yields should boost financial stocks".

With inflation stubbornly soft despite a 16-year low in the USA unemployment rate, the Federal Reserve should move only slowly to raise interest rates and trim its massive bond portfolio, Chicago Fed President Charles Evans said Monday.

Unemployment and inflation levels "pretty good place to be". Sterling ticked gently lower throughout the day against the dollar, trading down around 0.2 percent at $1.2751 by 1900GMT, having opened the day slightly higher.

Chinese shares .CSI300 advanced 0.55 percent after data showed home prices rose 10.4 percent in May from a year ago, although slowing from April's 10.7 percent gain. The Bank of Japan's made a decision to keep its ultra-loose monetary policy unchanged last week, putting it out of step with other major central banks such as the Fed which are raising rates.

The Dow Jones Industrial Average .DJI rose 144.71 points, or 0.68 percent, to end at 21,528.99, the S&P 500 .SPX gained 20.31 points, or 0.83 percent, to 2,453.46 and the Nasdaq Composite .IXIC added 87.26 points, or 1.42 percent, to 6,239.01.

The Jasdaq Stock Index and TSE Second Section Price Index continued rising after both indexes closed at record highs on Monday.

Gold fell to a near five-week low on Monday as the dollar rose after hawkish comments from a top Fed official, but uncertainty created by the start of talks on the terms of Britain's departure from the European Union prevented deeper losses. USA gold futures fell 0.3% to $1,252.5.

USA gold futures fell 0.4 percent to $1,251.6. BrentLCOcv1 settled 1 percent lower at $46.91.

  • Zachary Reyes