Asia stocks fall while dollar crawls up, oil near 8-week high

The U.S. two-year note yield, among the maturities most sensitive to the outlook for Fed policy, was little changed this week at 0.72 percent as of 6:25 a.m.in NY today, according to Bloomberg Bond Trader data.

Fed Bank of San Francisco President John Williams said on Thursday it makes sense to get back to a pace of gradual increases, preferably sooner rather than later.

Asian stocks retreated on Friday and the dollar edged up from a near eight-week low after some Federal Reserve officials reiterated the case for raising interest rates in coming months. USA gold dropped 0.4 per cent to $1,351.60 an ounce.

The silver contract for September delivery was trading at ~$19.34 per ounce, a drop of ~2%. On Tuesday, Mr Dudley said the Fed could potentially raise interest rates as soon as next month, while Atlanta Fed president Dennis Lockhart said he’s confident that United States economic growth is accelerating, setting the stage for at least one increase in interest rates this year.

Reports showed the number of Americans filing for unemployment benefits fell more than expected last week, while there was a mild improvement in manufacturing activity in the United States mid-Atlantic in August.

“It’s really mostly dollar selling [after] yesterday’s FOMC minutes release, which was much less hawkish than the market thought it would be”, said Boris Schlossberg of BK Asset Management, referring to the Federal Open Markets Committee, the Fed’s policy body.

Higher rates tend to tiresome nonyielding gold’s appeal in favor of higher-yielding alternatives.

The euro slipped 0.2 percent to $1.13320 EUR= after touching $1.1366 overnight, its highest since June 24.

According to the minutes of the July meeting of Fed officials, “a couple” of them advocated a rate increase, while the majority agreed that a “wait and see” approach would be better. Holdings of SPDR Gold Trust, the world’s largest gold-backed ETF, fell for a second day.

Members of the Fed’s rate-setting Federal Open Market Committee were generally upbeat about the U.S. economy and labour market, but several said any slowdown in future hiring would augur against a near-term hike.

European shares .STOXX fell 0.8 percent on the day and almost 2 percent for the week, their biggest weekly loss since mid-June.

Silver was down 0.5 per cent at $19.63 an ounce.

The US currency gained 0.3 per cent to 100.21 yen. The dollar against a basket of six major currencies was up about 0.31 percent at 94.447.

A gauge of stock markets around the world .MIWD00000PUS fell 0.4 percent.

Palladium was down 1% at $705.47, after hitting an one-week high of $717.70 on Thursday.