The dollar has shed some of its early gains today in opposition to its primary rivals after Fed Vice Chairman Stanley Fischer stated that the central bank will not be increasing interest rates until inflation is back to normal. Dollar traders are closely monitoring any and all comments related to the first interest rate increase since 2006, as the impending hike will influence the value of the USD. While many expect a September increase, economic data will likely need to remain positive, or at least stable, for that to happen.
The remarks are quite the opposite of those made by Atlanta Federal Reserve Governor Dennis Lockhart who was interviewed by The Wall Street Journal last week. During that interview, Lockhart remarked that U.S. economic data would have to decline considerably to stop the Fed from increasing rates when they meet again in September. Lockhart will be speaking at the Atlanta Press Club later today. The next meeting of the Federal Reserve rate-setting committee is scheduled to start on September 16th.
Investors will be paying extremely close attention to any comments coming from the Federal Reserve governors this week, as there is little in the way of important U.S. economic data to be released. Employee wages continue to be the prospective concern for the Fed. Even though wage growth has been noted, it is still rather subdued by standards and the more robust USD is not helping matters.
The ICE U.S. dollar index is up 0.2% to 97.7200 at last check. The euro has weakened somewhat and decreased to $1.0957. The currency was trading at $1.0969 Friday afternoon in New York. The dollar was last trading at 124.60 yen, and increase from the ¥124.21 level seen late Friday. The Australian and New Zealand dollars have been among the worst performers versus the U.S. dollar following the release of disappointing Chinese production data. The aussie is down to 73.67 cents from 74.19 cents on Friday, while the kiwi has fallen to 65.81 cents, down from 66.21 cents.