Dollar rises broadly on Fed Rosengren's hawkish comments: Sept 12, 2016

Market Review - 10/09/2016 04:02GMT

Dollar rises broadly on Fed Rosengren's hawkish comments

The greenback rose across the board on Friday after comments from Fed Officials increased speculation of a rate hike from the central bank in September.

Fed's Rosengren said 'sees 'increasingly two-sided' risks to economic forecast; gradual policy tightening likely to be appropriate; current policy increases chance of overheating; sees risks to overshooting on economy's growth; U.S. has proven relatively resistant to shocks from abroad; low market volatility, strong stock prices show resilience of U.S. economy; modest wage pressures consistent with tightness in labor markets; labor market could well exceed 'full employment' next year; weakness in GDP growth likely to reverse in second half of year; sees better than 2% GDP growth over next two quarters.'

Versus the Japanese yen, although the greenback retreated to session low at 101.97 in Asian morning, price pared its losses and rallied to an intra-day high at 103.06 at New York open on dollar's broad-based strength before retreating to 102.54 on profit-taking.

The single currency edged up to session high at 1.1285 at European open, however, renewed selling there pressured the pair lower and euro tumbled to session lows of 1.1199 in New York morning, weighed by cross-selling of euro vs sterling, however, price later recovered on weekend short covering.

Despite rebounding to 1.3336 in Asia, the British pound retreated to 1.3287 in European morning before recovering. However, renewed selling at 1.3326 at New York open pressured the pair lower and cable tumbled to day's low at 1.3239 on dollar's strength in New York morning before staging a minor recovery in tandem with euro.

In other news, Fed's Tarullo said 'room for robust discussion on whether economic momentum is holding up; there is an opportunity for more jobs gains; doesn't think anyone knows where full employment is; wants more evidence on inflation moving to 2%; optimal to look at actual evidence that inflation will continue to go up, be sustained at 2%; doesn't foreclose possibility of rate rise this year.'

Data to be release :

Japan domestic corporate goods price index and machinery order on Monday.

Japan business survey index, Australia business confidence, business condition, China industrial output, retail sales, Germany CPI, HICP, Swiss producer and import price, Italy industrial output, U.K. CPI, RPI, PPI, house price index, Germany ZEW survey, Eurozone ZEW survey, employment, U.S. business optimism, Redbook index and Federal budget on Tuesday.

New Zealand current account, Australia consumer sentiment, Japan industrial output, capacity utilization, France CPI, Italy CPI, U.K. unemployment change, unemployment rate, average earning, Swiss ZEW survey, Eurozone industrial production, U.S. mortgage application, import price and export price on Wednesday.

New Zealand manufacturing PMI, GDP. Australia employment, unemployment rate, participation rate, Swiss rate decision, U.K. retail sales, Eurozone trade balance, inflation, U.K. QE total, MPC vote, rate decision, U.S. current account, NY Empire State manufacturing index, PPI, retail sales, industrial output, capacity utilization, manufacturing output and business inventories onThursday.

Italy trade balance, Eurozone labour cost, wage in Eurozone, U.S. CPI, Reuters/Michigan consumer sentiment index, TIC flow and Canada manufacturing sales on Friday.