#XMINDO_FX MARKET - Aug 22 The U.S Dollar weakened against major rivals on Thursday, from the highest level in almost one year, as investors bet that global central bankers will stick to their easy-money policies when they meet today, with Federal Reserve Chair Janet Yellen also speaking today at the meeting of central bankers in Jackson Hole, Wyoming. “Many participants noted that if convergence toward the committee’s objectives occurred more quickly than expected, it might become appropriate to begin removing monetary policy accommodation sooner than they currently anticipated,” the minutes of the Fed’s July 29-30 meeting had showed. The Federal Open Market Committee last month debated how much slack remains in labor markets, and came closer to an agreement on how to exit from the most aggressive stimulus in the Fed’s 100-year history, minutes from the July meeting showed. Fed Chair Janet Yellen will provide her take on the latest data on labor markets in a keynote speech today at the Kansas City Fed’s annual symposium in Jackson Hole, Wyoming. The jobless rate is still as much as a percentage point higher than Fed officials’ estimate of full employment. Both the FOMC statement last month, and the minutes released this week, emphasized there is still a “gap” between current labor-market conditions and “normal levels of labor utilization. ” In her Jackson Hole speech, Yellen could, as the minutes did, stress job-market progress. Or she could continue to point to the slack shown on her dashboard of labor-market data. On the data side, the August reading of the Philadelphia Fed index jumped to 28 from 23.9 in July, marking the highest level since March 2011. Two readings of manufacturing sentiment in August reached their best level in at least three years, further signals that factory output is advancing. The leading economic index for the U.S. rose 0.9% in July, following strong gains in June and May, in another sign that growth has ramped up over the summer. Also, sales of previously owned homes in July hit the fastest pace in 10 months, suggesting that the housing sector is picking up after a rough start to the year. The Federal Reserve should begin to hike short-term interest rates sooner rather than later, said Esther George, the president of the Kansas City Fed, on Thursday. George said the economy is growing more slowly than many people had hoped but has shown broad-based improvement over the past year. John Williams, president of the Federal Reserve Bank of San Francisco, believes the central bank will begin hiking rates in the summer of 2015. Williams said that current economic conditions continue to warrant low-rate policies, though labor market conditions are improving. The Federal Reserves current policy stance is risky in light of economic conditions, said Charles Plosser, the president of the Philadelphia Fed, on Thursday. The consequences could be dire if we get this wrong, he said. Plosser said the longer the Fed waits, the more likely it is that the central bank will have to raise rates sharply. The Fed might have to race to catch up with inflation, he said. The Dollar Index, which tracks the performance ofbasket of six other major currencies, was down by 0.111% at 82.159. xmindofx/market-news
Posted on: Fri, 22 Aug 2014 12:25:34 +0000
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