· The Federal Reserve should remain focused on gradually tightening U.S. policy because one-off factors, not a long-lasting trend, have caused inflation to weaken in recent months, a hawkish Fed official said on Wednesday.
The Federal Reserve should not "overreact" to weak inflation especially since data will arrive before a mid-September policy meeting that could clarify whether the weakness is temporary, Cleveland Fed President Loretta Mester said on Wednesday.
· The U.S. economy will likely be strong enough for the Federal Reserve to trim its bond holdings in September, San Francisco Fed President John Williams said on Wednesday, in a sign the central bank was close to unwinding a controversial stimulus tool.
· St. Louis Federal Reserve James Bullard is opposed to further U.S. interest rate increases by the central bank and warned that more hikes could hinder domestic inflation from achieving the Fed's 2-percent goal, Market News International reported on Wednesday.
"Given the inflation outlook, which has deteriorated in 2017, I would not support further moves in the near term," Bullard told Market News in an interview on Tuesday. "It's possible data will turn around, but we'll have to see. I think for now we should remain on pause."
· The U.S. dollar hit its lowest level against the euro in more than 2-1/2 years on Wednesday on doubts about another Federal Reserve interest rate increase this year and expectations for European Central Bank hawkishness.
The euro hit $1.1909 EUR=, its highest level against the dollar since January 2015. In contrast to the political risks and monetary policy uncertainty that have plagued the dollar, the common currency has drawn support from expectations that the ECB would eventually begin phasing out its easy policy.
Bullard's comments reinforced skepticism surrounding another Fed rate increase this year, analysts said. Expectations for another hike in December last stood at about 46 percent, according to CME Group's FedWatch tool.
The dollar index, which measures the greenback against a basket of six major rivals, touched a 15-month low of 92.548 .DXY and was last down 0.2 percent at 92.833. The dollar gained slightly against the yen and was last at 110.59 yen, hovering above a more than six-week low touched Tuesday of 109.91 yen JPY=.
· U.S. private employers added 178,000 jobs in July, below economists' expectations, a report by a payrolls processor showed on Wednesday.
Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 185,000 jobs, with estimates ranging from 151,000 to 225,000 jobs added. Private payroll gains in the month earlier were revised up to 191,000 from an originally reported 158,000 increase.
· U.S. President Donald Trump grudgingly signed into law new sanctions against Russia on Wednesday, a move Moscow said amounted to a full-scale trade war and an end to hopes for better ties with the Trump administration.
· After a crackdown on illegal immigration that has sharply reduced the number of unauthorized border crossings from Mexico, U.S. President Donald Trump is now turning his attention to reducing the number of legal immigrants in the country.
· A ban on travel by U.S. passport holders to North Korea will take effect on Sept. 1 and Americans in the country should leave before that date, the U.S. State Department said on Wednesday.
· Oil prices edged higher on Wednesday, as surging U.S. fuel demand and strong refinery runs offset data from the Energy Department that showed crude inventories did not fall as much as expected last week.
Crude inventories in the United States USOILC=ECI fell by 1.5 million barrels in the week to July 28, the Energy Information Administration said, about half the decline analysts had expected.
- Brent crude futures LCOc1 ended the session up 1.1 percent, or 58 cents, at $52.36 a barrel after hitting a session low of $51.18.
- U.S. West Texas Intermediate crude CLc1 rose 0.9 percent to settle at $49.59 a barrel, after falling to a low of $48.55 earlier in the session.
Strong refinery runs continued to boost demand for crude. Refinery crude runs USOICR=ECI rose by 123,000 barrels per day last week, EIA data showed.
Reference: Reuters
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