Chicago Fed President Evans Makes Case for Skipping September Rate Hike

The British pound GBP=D3 fell nearly 0.1 percent to $1.2769 from late Friday levels in NY after a van rammed into worshippers as they were leaving Finsbury Park mosque in North London early on Monday. Spot gold was up 0.3 percent at $1,246.26 per ounce by 1011 GMT, after earlier touching a low of $1,242.61 an ounce, the weakest since May 17. Gold's August delivery sink on earlier trading by 0.2% but manage to recuperate some of its losses and manages to edge higher by 0.1.

Among other metals, spot palladium was up 1.3% to $872.83, and platinum rose 0.4% to $928 per ounce.

The dollar was subdued after USA homebuilding fell for a third month in May to the lowest in eight months and a barometer of US consumer sentiment unexpectedly fell in early June, prompting concerns about the Federal Reserve's plans to stick with its monetary policy tightening. Against a basket of six major currencies, the dollar rose to as high as 97.609 at one point on Tuesday, its highest level since May 30.

The U.S. dollar and Treasury yields moved higher after comments from New York Federal Reserve President William Dudley that reinforced expectations the central bank will continue on its path of tightening monetary policy.

Chicago Fed President Evans stated that it could make sense to delay a further rate hike until December, although he also commented that that recent inflation data should not prevent balance sheet reduction and the comments were not overtly dovish and there was significant negative dollar reaction. "It (another rate hike) is not entirely unlikely". Investors also kept a wary eye on politics, with the dual uncertainty of having no government at home 12 days after a parliamentary election and talks, which began on Monday, on Britain's exit from the European Union also added pressure on the pound. It reached session high at 1.2655 and dropped to session low at 1.2600 levels.

Dudley's comments boosted the USA dollar index, which tracks the currencies of Washington's six major trading partners.

The Philippine peso weakened as much as 0.4 percent on Tuesday to a seven-week low.

SAN FRANCISCO/WASHINGTON The outlook for inflation and the future of financial stability are emerging as dueling concerns at the heart of a debate at the US central bank over how fast to proceed on future interest-rate hikes.

U.S. crude rose 0.29 per cent to $44.87 per barrel and Brent was last at $47.58, up 0.44 per cent on the day.

Benchmark 10-year notes last fell 8/32 in price to yield 2.1827 percent, from 2.157 percent late on Friday.

  • Zachary Reyes