March 21 2018

Euro rises towards 2 1/2-year highs against dollar

March 21 2018, 10:24 | Clarence Walton

The US Federal Reserve says there are doubts around its own framework to project the correct inflation rate. Bloomberg

The US Federal Reserve says there are doubts around its own framework to project the correct inflation rate

Some Fed members argued the United States central bank can afford to "be patient" before raising rates again, according to minutes of the July meeting that also showed policymakers remained befuddled by weak inflation that has persisted despite historically low unemployment.

The 30-year bond US30YT=RR last rose 18/32 in price to yield 2.8127 percent, from 2.84 percent late on Tuesday.

At 9:39 a.m. ET, the Dow Jones Industrial Average was up 46.94 points, or 0.21 per cent, at 22,045.93 and the S&P 500 was up 4.79 points, or 0.19 per cent, at 2,469.40. {0005,0096, PLUS GRADES U.S. economy mostly healthy, though not without few signs of concern [@CG:91942]} Overall, the FOMC members' prognosis of the U.S. economy was mostly healthy, especially in its labor market and household spending.

The dollar's fall after the release of the minutes extended a decline that followed news that several chief executives would leave US President Donald Trump's manufacturing council and strategic policy forum, and his tweet saying he would disband the high-profile advisory councils.

The S&P materials index rose the most of any sector, gaining 0.9%, following gains in copper and other metals.

- The U.K.'s FTSE 100 index surged 0.7 percent.

It is down 2 percent from a high of 1.1910 at the start of August.

The Stoxx Europe 600 Bank Index dropped 0.9% on the dimmer rate-hike outlook, as many European banks have operations in the USA and higher rates can aid net interest margin.

The euro traded at $1.1771, having gained 0.3 percent the previous day and recovering from low of $1.1681, its lowest level in almost three weeks.

- The Bloomberg Dollar Spot index fell 0.4 percent.

The Australian dollar held at $0.7937, rising above a trough of $0.7816 touched on Wednesday. Oil prices ( settled lower after the Energy Information Administration said crude supplies fell for a seventh week but domestic production reached rose to the highest weekly level in over two years. Brent crude futures rose 0.40 percent to trade at $50.47 a barrel and US crude futures tacked on 0.26 percent to trade at $46.90.

The minutes, released at 1130 GMT just as USA investors were coming online, spurred an nearly 1 percent fall in the single currency against the dollar along with losses against the Swiss franc, yen and sterling.

Hong Kong's Hang Seng Index gained 0.21% as earnings reporting season continued. Across the Korean strait, the Kospi advanced 0.49%. On the Nasdaq, 1,525 issues rose and 660 fell.

With assistance from Adam Haigh and Robert Brand.

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