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US dollar falters amid mixed Fed rate signals

Tuesday, September 13, 2016 - 07:44

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The US dollar weakened slightly on currency exchange markets Monday as investors attempted to parse conflicting signals on the direction of US monetary policy.

[NEW YORK] The US dollar weakened slightly on currency exchange markets Monday as investors attempted to parse conflicting signals on the direction of US monetary policy.

Toward 2100 GMT, the euro was at US$1.1234, up from US$1.1232 at the same time on Friday. The US dollar bought 101.85 yen, down from 102.69, and the pound stood at US$1.3336, up from US$1.3268.

US Federal Reserve members are due to meet next week to review interest policy. And in a speech delivered Monday, Federal Reserve Governor Lael Brainard cautioned against calls to raise US interest rates prematurely.

Her words seemed to help boost stock prices, which had been moving higher since the start of Monday's trading on Wall Street.

By contrast, on Friday Boston Fed President Eric Rosengren spoke of the potential need for "gradual tightening" of rates, which caused stock markets to tumble two per cent.

"We're more or less where we were ahead of Ms Brainard's speech," said Omer Esiner of Commonwealth Foreign Exchange.

"The US dollar for the most part is on a slightly better footing than it was last week, based on some expectations that interest rates still could raise this month when the Fed meets."

AFP

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