Dollar Falls as Traders Trim Bets on September Fed Rate Increase

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The dollar fell after minutes from the Federal Reserve’s latest policy meeting led traders to reduce bets that the central bank will increase interest rates in September.

Most meeting participants “judged that the conditions for policy firming had not yet been achieved, but they noted that conditions were approaching that point,” according to minutes of the July 28-29 Federal Open Market Committee session, released Wednesday in Washington.

The Bloomberg Dollar Spot Index fell 0.4 percent to 1,206.87 as of 2:16 p.m. New York time.

Futures show traders see about a 38 percent probability the Fed will raise its benchmark rate at its Sept. 16-17 meeting, based on the assumption that the effective fed funds rate will average 0.375 percent after the first increase. That’s down from 50 percent before the minutes were released. The Fed has kept its key rate in a range of zero to 0.25 percent since December 2008.

Source : Bloomberg

Asian Stocks Fall Fifth Day on Fed Minutes, China Slowdown Fears

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Asian stocks fell for a fifth day after Federal Reserve minutes showed U.S. officials sought more progress on inflation and investors watched China as concerns heighted over the nation’s slowdown.

The MSCI Asia-Pacific Index slid 0.1 percent to 135.87 as of 9:05 a.m. While the Fed’s minutes quelled speculation the central bank will raise rates at its next gathering, China’s shock currency devaluation continued to roil emerging-market assets, with concern China’s slowdown will limit global growth fueling a rout in commodities. Gold and silver gained on haven demand while oil and copper extended losses.

Japan Topix index slid 0.5 percent. South Korea’s Kospi index fell 0.4 percent. Australia’s S&P/ASX 200 Index dropped 0.6 percent. New Zealand’s NZX 50 Index was little changed. Markets in China and Hong Kong have yet to open.

Chinese stocks fell this week after the securities regulator said late Friday the state agency tasked with supporting share prices will reduce buying as volatility falls. China’s richest traders are cashing out of stocks, while a record drop in yuan positions at the central bank and financial institutions last month signaled investors are moving money out of the country.

Source : Bloomberg

Japanese Stocks Fall After Yen Rises on Bets Fed Will Hold Rates

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Japanese stocks fell after the yen strengthened against the dollar as minutes from the Federal Reserve’s latest policy meeting led traders to reduce bets that the central bank will increase U.S. interest rates in September.

The Topix index lost 0.4 percent to 1,641.39 at 9:01 a.m. in Tokyo, with all but six eight of its 33 industry groups retreating. The Nikkei 225 Stock Average declined 0.2 percent to 20,181.21. The yen traded at 123.92 per dollar after gaining 0.5 percent on Wednesday. China’s currency devaluation continued to roil emerging-market assets, with concern over the impact of a Chinese slowdown on global growth fueling a rout in commodities.

E-mini futures on the Standard & Poor’s 500 Index added 0.1 percent after the underlying gauge slipped 0.8 percent in New York on Wednesday.

U.S. policy makers said at their meeting in July that they need to see further improvement in the U.S. labor market and inflation rate before raising rates, the Fed minutes showed. The consumer price index climbed 0.1 percent in July, the smallest advance in three months, a Labor Department report showed Wednesday in Washington.

Source: Bloomberg

U.S. Stocks Fall as Fed Boost Fades Amid Oil Rout, China Concern

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A midafternoon rally in U.S. stocks faded as encouragement from Federal Reserve minutes proved fleeting and investors refocused on China and the global economy.

Stocks briefly trimmed losses as Fed minutes showed policy makers judged conditions for higher rates haven’t been met yet. While that reduced speculation the central bank will raise rates at its next gathering, China’s shock devaluation continued to roil emerging-market assets and threatened to slow global growth amid a rout in commodities.

The Standard & Poor’s 500 Index fell 0.8 percent to 2,079.61 at 4 p.m. in New York, hovering above its average price for the past 200 days. The gauge nearly erased all of its losses after the minutes were released, before it resumed a slide. The Dow Jones Industrial Average lost 162.61 points, or 0.9 percent, to 17,348.73.

Caterpillar Inc. and Freeport-McMoRan Inc. paced declines as raw-material and industrial shares slumped more than 1 percent as a group. Energy shares tumbled the most since January as an unexpected increase in U.S. crude stockpiles sent oil prices deeper into a bear market.

Source : Bloomberg