(MENAFN- Gulf Times) Most Asian markets fell yesterday but the dollar rose on bets on a US interest rate hike this year after the Federal Reserve";s vice chairman said the country";s economy was picking up.
Stanley Fischer said Sunday the world";s top economy was meeting all the Fed";s targets and that growth would improve, hinting that borrowing costs could rise this year.
Fischer was speaking as his boss, Janet Yellen, prepares to give a closely watched speech at the Jackson Hole gathering of global central bankers on Friday.
His comments provided some much-needed support to the dollar following the release last week of minutes showing Fed policymakers wanted to keep their 'options open” for monetary policy as they assess the global outlook.
The board was divided on the near-term danger of inflation, with some seeing little threat but others worried that there could be a sudden upward push on prices as the jobs market tightens.
However, the latest comments raised the possibility that the bank could lift rates at its next policy meeting next month.
In afternoon trade the dollar bought ¥100.78, up from ¥100.20 in New York Friday and much better than the levels below ¥100 touched in the middle of last week following disappointing economic data.
The euro eased to $1.1281 from $1.1324.
'Janet Yellen";s speech on Friday will have the biggest impact on short-term market moves, especially if she follows in Stanley Fischer";s relatively hawkish tone,” Angus Nicholson, a market analyst at IG, told Bloomberg News.
The weaker yen helped Japan";s Nikkei stock index to end 0.3% higher, while Hong Kong added 0.3% although other markets struggled.
Sydney fell 0.2% and Shanghai closed 0.8% lower, while there were also steep losses in Seoul, Singapore and Taipei.
In early European trade London, Paris and Frankfurt each fell 0.3%.
Oil prices sank more than 1% after last week";s rally after Iraq said at the weekend that it intends to increase shipments, according to Bloomberg News, while US firms again increased their rig count.
The stronger dollar also hit demand as it makes crude more expensive for anyone holding other currencies.
West Texas Intermediate slipped 1.7% to $47.71 and Brent fell 1.7% to $50.01.
The losses come after a seven-day rally that saw the commodity enter a bull market — a 20% rise from recent lows — as it emerged that the Opec and its rivals will meet next month, with speculation they could discuss ways to tackle an oversupplied market.
However, there remain doubts about whether a deal to address output would be reached.
'The stars remain misaligned for an Opec/non-Opec freeze agreement, but it is beneficial for producers to talk,” British bank Barclays said in a market analysis.
In Tokyo, the Nikkei 225 up 0.3% at 16,598.19 points; Shanghai — Composite down 0.8% at 3,084.81 points and Hong Kong — Hang Seng up 0.3% at 22,997.91 points at the close yesterday.