Dollar under pressure as Fed’s Dudley cools rate-hike views

The euro EURUSD, +0.1470% strengthened to $1.0921, compared with $1.0924.

But oil prices have since resumed declining, shaking equity markets and bringing investors’ focus back to global growth woes and central bank policies.

The ten-year U.S. Treasury yield was down 1.828 pct at one point as of Wednesday, its lowest since April 2015.

Bank of Japan Governor Haruhiko Kuroda said the central bank has ample room to expand stimulus further and is prepared to cut interest rates deeper into negative territory signalling a readiness to act again to hit his ambitious inflation target. Such falls in USA yields amid concerns about slowing United States economic growth and growing investor doubts about how much the Federal Reserve can raise interest rates this year have posed headwinds for the dollar.

But “individuals’ deposits will not become subject to negative interest rates”, he added, citing experience in Europe, where the European Central Bank has introduced negative interest rates. Of the remainder, an initial 10 trillion yen will be subject to the negative rate, while 40 trillion yen will earn zero interest.

The latest decline in oil hounded commodity currencies, though the New Zealand currency rallied after robust employment figures.

On Wall Street, the benchmark S&P 500.SPX stock index was last down 1.8 percent.

The New Zealand currency was up 0.5 pct to $0.6544 outperforming the Australian dollar, which dropped 0.3 pct versus the greenback to $0.7015.

The Aussie is seen remaining on the defensive after sliding 1 percent on Tuesday when the Reserve Bank of Australia stood pat on monetary policy but left the door open to future easing.