· The dollar steadied in Asian trading on Tuesday, maintaining most of the gains it made on last week's robust employment data that kept hope alive that the U.S. Federal Reserve could still increase interest rates this year.
The dollar index, which tracks the greenback against a basket of six major rivals, was steady on the day at 93.412. It held well above last week's 15-month low of 92.548, though was shy of Friday's post-jobs data high of 93.774 as investors pondered the timing of the U.S. central bank's next tightening steps.
Investors also await clues as to when the Fed will begin shrinking its $4.2 trillion bond portfolio.
- Against its Japanese counterpart, the dollar edged up to 110.78 yen.
- It was also steady against the euro, which was buying $1.1800.
· The Federal Reserve can leave interest rates where they are for now because inflation is not likely to rise much even if the U.S. job market continues to improve, St. Louis Fed President James Bullard said on Monday.
The personal consumption expenditures (PCE) price index excluding food and energy, which is the Fed's preferred gauge of inflation, has been running at 1.5 percent and has trended away from the central bank's 2 percent target in recent months.
That measure is forecast to rise only to 1.8 percent if the U.S. unemployment rate falls to an "unprecedented" 3percent from the current 4.3 percent, Bullard said. With so little upward pressure on inflation, the Fed does not need to raise rates to slow growth, he said.
Bullard's comments are largely in line with those he has been making for over a year. He has argued that the Fed does not need to raise rates until the U.S. economy breaks out of its pattern of low inflation and about 2 percent annual growth.
· Minneapolis Fed President Neel Kashkari said Monday that businesses who complain they are having trouble finding workers but don't raise wages are just "whining."
· Oil prices fell as much as 2 percent on Monday on selling triggered by a rebound in production from Libya's largest oil field, along with worries about higher output from OPEC and the United States.
- Global benchmark Brent crude futures LCOc1 were down 26 cents, or 0.5 percent, at $52.16 a barrel at 2:05 p.m. EDT (1805 GMT) after trading as low as $51.37 a barrel
- U.S. crude futures CLc1 were down 34 cents, or 0.7 percent, at $49.24 per barrel, after seeing a low of $48.54 a barrel.
Both contracts stood below levels hit last week, which marked their highest since late May.
· Output at Libya's Sharara field was returning to normal after a brief disruption by armed protesters in the coastal city of Zawiya, the National Oil Corporation (NOC) said. The field has boosted Libya's oil production, which climbed to more than 1 million bpd in late June.
· North Korea is ready to give the United States a "severe lesson" with its strategic nuclear force if it takes military action against it, and will not put its nuclear program or its missiles on the negotiating table, it said in a statement to a regional meeting on Monday.
Reference: Reuters, Market Watch
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