HONG KONG: Asian traders moved cautiously Monday while the dollar rose on bets on a US interest rate hike this year after the Federal Reserve’s vice chairman said 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 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 early trade the dollar bought 100.77 yen, up from 100.20 yen in New York Friday and much better than the levels below 100 yen touched in the middle of last week following disappointing economic data.
