Dollar Flat as Stock Market Rally Fades

That comes after Yellen cited China’s economic slowdown as a reason for holding the line in September.

The seasonally adjusted merchandise trade deficit in August widened to $3.10 billion from $2.79 in July but narrowed form $3.35 in June, the Australian Bureau of Statistics said. The yen is likely to find support around the 126.00 area. However, a few analysts said a US rate hike in December could not be ruled out entirely.

The euro was last up 0.70 percent against the dollar at $1.12685 EUR=EBS. This can be compared to an early 4-day high of 1.7355.

There have been expectations that the interest rates could move in the coming year.

TOKYO – Fading expectations that the US Federal Reserve will raise interest rates this year and a bounce in oil and commodity prices helped lift Asian stocks to two-week highs on Tuesday.

Large volume in the USA stock market’s rally on Monday suggests that at least the downside momentum is now broken, said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Sarasota, Florida.

USA stocks aren’t the only ones to start the fourth quarter on a positive note, as stock markets in Japan have also posted several days of gains.

The Japanese currency was tipped to ease further on the prospect that the Bank of Japan, which began a two-day meeting Tuesday, could offer further easing measures later this year. To the upside, immediate resistance can be seen at 120.40. Based on differences in yields, traders expect inflation to average less than 1.5 percent per year over the next decade. It has made session high at 1.3115 and lows at 1.3028 levels.

Looking ahead, services PMI reports from major European economies for September and Eurozone retail sales data for August are due to be released later in the day.

A weakening dollar also added support for oil, while the U.S. Energy Information Administration projected in a monthly forecast that the country’s crude output will fall through mid-2016.

Deflation also re-emerged in Japan, just as Prime Minister Shinzo Abe declared that Japan had successfully shrugged off its “deflationary mindset”. To the upside, immediate resistance can be seen at 1.3175. The statements were by no means hawkish and the RBA clearly stated that monetary policy needed to be accommodative, ” he said. That assumes the first increase will bring the effective rate to 0.375 percent.

Against the yen the dollar dipped to as low as 119.75 yen JPY= after the BOJ refrained from easing.

Dow Jones ended up by 0.08 percent, S&P 500 ended down 0.36 percent, Nasdaq finished the day down 0.69 percent. 26 late Tuesday in New York.

The 30 year old bond was up 14/32 in prices to yield2.

The unit rose 1.8 percent to 14,233 per USA dollar after gaining as much as 2.2 percent earlier.

Brent edged closer to the top end of its rough $46-$50 trading band in the past month.

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