Interest rates in the United States are on a gradual upward path but the timing of hikes will depend on developments in the economy, a top Federal Reserve official said on Tuesday.
Speaking at a banking conference in Sydney, Cleveland Fed President Loretta Mester said she was comfortable that the central bank was not behind the curve on monetary policy and inflation.
But she declined to offer any specific guidance on whether rates would stay on hold for the rest of the year.
Asked about strong June payroll data released last week. Mester said it was a positive report and that the country was basically near full employment.
BOE’s RATE CUT?
Earlier, sterling hovered just above last week's 31-year low against the dollar on expectations the Bank of England would ease monetary policy in response to Britain's shock vote to leave the EU.
The BoE, which meets on Thursday, expects the economy to suffer a slowdown because of the uncertainty caused by the Brexit vote though there is scant evidence of the impact so far. Markets price in a more than 70 percent chance of the Bank cutting rates this week, from 11 percent just before the result of the June 23 referendum was announced. GBPOIS=ICAP
The Bank has kept its main interest rate at 0.5 percent for nearly 90 months.
"We expect the BoE to cut rates by 25 basis points on Thursday, which should keep sterling offered," said Hans Redeker, head of currency strategy at Morgan Stanley.
There are clear signs the economy needs a boost.
According to three surveys released on Monday, British consumer spending fell last month, the business outlook darkened by the most in four years and economic activity in London slowed sharply.
Yen sags as Japan stimulus hopes bolster risk sentiment
The yen hit a one-week low versus the dollar on Tuesday, after a weekend election victory by Japan's ruling coalition fanned expectations of more economic stimulus and bolstered risk sentiment.
Gains in equity markets helped spur selling of the yen, which had risen recently on safe haven demand after Britain's vote to leave the European Union added to worries over global growth.
The dollar rose 0.3 percent to 103.05 yen JPY= and touched a high of 103.29 yen at one point, its strongest level since July 1.
Another focus in coming weeks is whether the Bank of Japan will expand monetary stimulus at its policy meeting in late July.
Oil prices rise on Iraq loading worries; bearish investors cap gains
Oil futures rose on Tuesday as an interruption in Iraqi crude loadings at Basra threatened to tighten supplies, but prices held close to two-month lows hit in the previous session as investors continued to slash their bullish bets.
Brent crude oil futures were trading at $46.39 per barrel at 0320 GMT, up 14 cents from their last close but still near the Friday's low of $45.90. U.S. West Texas Intermediate (WTI) crude was up 11 cents at $44.87 a barrel.
Traders said the rise in prices was largely a result of a suspension of tanker loading of Basra Light crude at two export terminals in Iraq's south after a pipeline leak.
Although loadings reportedly resumed overnight, Iraq plans to cut crude oil exports from its southern ports to 2.79 million barrels per day (bpd) in August from 2.99 million bpd planned for July, a preliminary loading program showed.
Oil price gains have, however, been limited with financial players betting on price falls, or shorting the crude market, moving away from long positions that benefit from price rises.
Reference: Reuters
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