The U.S. job market is nearly at full strength and the pace of interest rate increases by the Federal Reserve will depend on how well the economy is doing, Fed Vice Chairman Stanley Fischer said on Tuesday.
In an interview with Bloomberg TV, Fischer did not comment on the timing of the next Fed rate hike but said "we choose the pace on basis of data," and that U.S. "employment is very close to full employment."
U.S. consumer confidence rose to an 11-month high in August, with households more upbeat about the labor market, in a further sign that the economy was regaining steam after faltering in the first half of the year.
Economists said this supported views by Federal Reserve officials that the jobs market was either at or near full employment. Fed Vice Chairman Stanley Fischer said on Tuesday that jobs market was "very close to full employment."
Consumers' bullish assessment of the labor market this month could be reflected in August's employment report, which is scheduled for release on Friday, economists said.
The dollar rose to a three-week high against a basket of currencies, and a one-month high against the yen, on Tuesday as investors looked ahead to crucial jobs data this week for clues on when the Federal Reserve will next raise interest rates.
Sentiment around the dollar has oscillated in recent weeks amid speculation over the Fed’s tightening plans after it raised rates in December for the first time since 2006. The speculation has helped the greenback trim its loss this year to 3.6 percent.
The dollar index, which measures the currency against a basket of six majors, rose as high as to 96.143 .DXY, its highest level since Aug. 9, before falling back to 96.062, up 0.50 percent on the day.
Oil prices fell Tuesday, with Brent losing nearly 2 percent, as the dollar rallied and glut worries grew amid forecasts for higher U.S. crude stockpiles and Iran's remark that it was on target to reach peak production.
News that energy firms in the U.S. regulated areas of the Gulf of Mexico had shut some 22 percent of crude oil equivalent output as a precaution to threats from a tropical storm limited some of the downside in crude prices.
Brent crude futures LCOc1 settled down 89 cents, or 1.8 percent, at $48.37 per barrel.
U.S. West Texas Intermediate (WTI) crude futures CLc1 fell 63 cents, or 1.3 percent, to close at $46.35.
It was a second straight day that oil slid on worries of oversupply and a strong dollar, adding to Monday's drop of more than 1 percent in Brent and WTI.
After the market settled, the trade group American Petroleum Institute reported that U.S. crude stockpiles rose 942,000 barrels last week, in line with expectations of analysts polled by Reuters. The U.S. government will release official inventory data on Wednesday. [EIA/S]
An Iranian government official said at an oil industry conference in Norway that Tehran's production was expected to hit 4 million barrels per day by year end. Iran was producing that much before Western sanctions reduced its exports.
Reference: CNBC,Reuters, Bloomberg
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