Currencies: Euro trims losses after U.S. job-openings report

NEW YORK (MarketWatch) — The euro trimmed its earlier losses Tuesday after the Department of Labor said U.S. job openings rose to a 14-year high in February.

The euro EURUSD, -0.58%  was at $ 1.0875, compared with $ 1.0937 Monday evening, trimming its earlier losses after the Labor Department showed that job openings rose to 5.13 million in February from 4.97 million in January. The dollar was little-changed against its other rivals after the report.

The euro had moved lower against the dollar early Tuesday as traders in Europe returned to their desks after a four-day weekend that included market holidays on Friday and Monday.

The euro had surged against the dollar Friday after the U.S. Labor Department reported the weakest rate of jobs growth in 15 months, and it continued to trade above $ 1.09 during Monday’s session.

But swings in the euro-dollar exchange rate were likely exaggerated over the last two sessions amid thin trading volume, analysts said. That said, thin volumes don’t always affect currency price moves, according to RBC Capital Markets.

“We’re seeing liquidity return and prices start to normalize,” said John Doyle, director of markets at Tempus Inc.

Currency traders appeared to shrug off data showing the eurozone economy grew at its fastest pace in 11 months in March.

Earlier in the global day, the Reserve Bank of Australia defied the market’s expectations and left its cash target rate, its benchmark interest rate, unchanged, sending the Australian dollar to its highest level against the buck in eight days.

The aussie AUDUSD, +0.74%  hit a session-high of 77.13 cents, before falling to 76.55 cents in recent trade. It traded at 75.99 cents Monday evening.

Financial markets had been pricing in a 75% chance the benchmark interest rate would be trimmed by 0.25 percentage point to a record-low 2.0%.

Read: Australia keeps interest rates steady at 2.25%

In other Asia trade USDJPY, +0.70%  rose to ¥120.17, compared with ¥119.48 late Monday in North America.

Boris Schlossberg, managing director of FX strategy at BK Asset Management, said that rising Treasury yields are attracting foreign flows to the U.S. dollar.

“In North America today the calendar is nearly barren so price action will likely be driven by equity and fixed income markets,” Schlossberg said in a note to clients.

The ICE U.S. Dollar Index DXY, +0.55% a measure of the dollar’s strength against a basket of six rivals, was up 0.7% to 97.4360.

Currencies: Euro down against dollar, yen after staging rally

The euro fell against the dollar and the yen in Asia trade Tuesday, with some traders adjusting positions after the currency staged a rally overnight.

The euro EURUSD, +0.31%  was at $ 1.0920 from $ 1.0946 late Monday in New York. That compares with a high of $ 1.0972 overnight but still below $ 1.1037 soon after the outcome of the Federal Open Market Committee last week.

The common currency EURJPY, +0.13%  was also at ¥130.53 from ¥131.07.

“After rising for no particular reason yesterday, (the euro) inevitably met with selling as it came closer to $ 1.10,” said Yuzo Sakai, manager of FX business promotion at Tokyo Forex & Ueda Harlow. Also investors are showing less of an appetite to buy the euro around ¥131, he added.

The single currency extended its recent rebound overnight after the Federal Reserve’s policy statement indicated it intends to proceed cautiously on interest-rate rises, much less aggressive than many had expected.

“It is natural to see a rebound to this extent” after the rapid pace of decline in recent sessions, said Sakai.

WSJ market wrap: March 23, 2015

U.S. stocks edged higher Monday, extending last week’s gains, though the Nasdaq Composite pulled back from its 15-year high. Tenet Healthcare agreed to a deal that will hand it control of United Surgical Partners International.

Federal Reserve Vice-Chairman Stanley Fischer said Monday the U.S. central bank remains on track to raise short-term rates this year.

Fischer said once rates begin to rise, they could easily move “up and down” depending on how the economy performs.

Over the near term, the euro may get a boost from short covering triggered by possible strength in eurozone PMI data later today, said Takuya Kawabata, analyst at Gaitame.Com Research Institute.

“If the pair manages to surpass the $ 1.10-mark, further gains are possible,” said Kawabata, who expects the pair to move in a $ 1.080-$ 1.1070 range Tuesday. But if U.S. inflation data also scheduled later today shows a stronger-than-expected pace of inflation, that may reignite hopes for an early U.S. rate increase that would bring about a return to the dollar buying.

Elsewhere, the Australian dollar AUDJPY, -0.28%  briefly hit as low as ¥93.85 after weak Chinese manufacturing activity data. The Aussie was most recently at ¥93.97.

The preliminary gauge of Chinese manufacturing activity by HSBC Holdings PLC fell to 49.2 in March, from 50.7 in February. A figure below 50 indicates contraction.

The WSJ Dollar Index BUXX, -0.17% a measure of the dollar against a basket of major currencies, was up 0.11% at 86.86.

Euro Down Against Dollar, Yen After Staging Rally


By Hiroyuki Kachi

The euro fell against the dollar and the yen in Asia trade Tuesday, with some traders adjusting positions after the currency staged a rally overnight.

Around 0450 GMT, the euro was at $ 1.0920 from $ 1.0946 late Monday in New York. That compares with a high of $ 1.0972 overnight but still below $ 1.1037 soon after the outcome of the Federal Open Market Committee last week.

The common currency was also at Y130.68 from Y131.07.

“After rising for no particular reason yesterday, (the euro) inevitably met with selling as it came closer to $ 1.10,” said Yuzo Sakai, manager of FX business promotion at Tokyo Forex & Ueda Harlow. Also investors are showing less of an appetite to buy the euro around Y131, he said added.

The single currency extended its recent rebound overnight after the Federal Reserve’s policy statement indicated it intends to proceed cautiously on interest-rate rises, much less aggressive than many had expected.

“It is natural to see a rebound to this extent” after the rapid pace of decline in recent sessions, said Mr. Sakai.

Federal Reserve Vice-Chairman Stanley Fischer said Monday the U.S. central bank remains on track to raise short-term rates this year.

Mr. Fischer said once rates begin to rise, they could easily move “up and down” depending on how the economy performs.

Over the near term, the euro may get a boost from short covering triggered by possible strength in eurozone PMI data later today, said Takuya Kawabata, analyst at Gaitame.Com Research Institute.

“If the pair manages to surpass the $ 1.10-mark, further gains are possible,” said Mr. Kawabata, who expects the pair to move in a $ 1.080-$ 1.1070 range Tuesday. But if U.S. inflation data also scheduled later today shows a stronger-than- expected pace of inflation, that may reignite hopes for an early U.S. rate increase that would bring about a return to the dollar buying.

Elsewhere, the Australian dollar briefly hit as low as Y93.85 after weak Chinese manufacturing activity data. The Aussie then stabilized at Y94.10 later in the session.

The preliminary gauge of Chinese manufacturing activity by HSBC Holdings PLC fell to 49.2 in March, from 50.7 in February. A figure below 50 indicates contraction.

The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.11% at 86.86.

 Interbank Foreign Exchange Rates At 23:50 EST / 0450 GMT                             Latest       Previous   %Chg    Daily    Daily   %Chg Dollar Rates                               Close            High      Low  12/31  USD/JPY Japan           119.70-71      119.72-73  -0.01   119.85   119.59  -0.01 EUR/USD Euro            1.0920-23      1.0945-48  -0.23   1.0968   1.0905  -9.73 GBP/USD U.K.            1.4940-45      1.4951-56  -0.07   1.4976   1.4921  -4.08 USD/CHF Switzerland     0.9679-83      0.9659-63  +0.21   0.9696   0.9646  -2.64 USD/CAD Canada          1.2528-33      1.2520-25  +0.06   1.2549   1.2504  +7.82 AUD/USD Australia       0.7856-60      0.7878-82  -0.28   0.7903   0.7839  -3.83 NZD/USD New Zealand     0.7649-55      0.7650-56  -0.01   0.7675   0.7628  -1.83  Euro Rate  EUR/JPY Japan           130.70-74      131.03-07  -0.25   131.20   130.62  -9.81 Source: ICAP PLC  

Write to Hiroyuki Kachi at [email protected]

    (END) Dow Jones Newswires   03-24-150138ET   Copyright (c) 2015 Dow Jones & Company, Inc. 




GLOBAL MARKETS-Euro rises, shares sag as dollar lays low ahead of Fed

* World shares hit one-week high; Asia gain from dollar pause

* Fed begins two-day policy meeting later on Tuesday

* Bank of Japan maintains policy, economic assessment

* Chinese shares near seven-year high on policy hopes

* Platinum hits 5 1/2-year low as precious metals struggle

By Marc Jones

LONDON, March 17 (Reuters) – The euro gained on Tuesday as the dollar laid low before a two-day meeting of the U.S. Federal Reserve where the central bank may edge closer to its first interest rate rise in almost a decade.

Solid gains for Asian markets overnight failed to transfer to Europe where the recent rally in euro zone shares and bonds stalled as the euro notched its first two-day run of gains in three weeks, a disadvantage for the bloc’s exporters.

Wall Street was expected to give back around 0.3 percent of Monday’s 1.3 percent jump when it resumes, while oil and other commodity markets also remained under heavy pressure from a global supply glut.

Fed policymakers will kick off their two-day meeting later, and many analysts expected them to remove the “patient” reference to rate rises from their policy statement. That would put them a step closer to their first hike since 2006.

Economists polled by Reuters are almost evenly split on whether a rate increase will come in June or later in the year. But more downbeat housing data on Tuesday added to lacklustre U.S. manufacturing and other housing figures on Monday that had fuelled talk that the Fed would remain cautious.

“U.S. data has remained on the weak side, despite tightness in the labour market. This allows the FOMC (Fed) to remove the patience language and remain dovish in the statement tomorrow,” said Nick Lawson, a managing director at Deutsche Bank.

“That so much discussion around the economy is still warranted whilst equity price performance marches on toward imperious new highs is clear evidence that assets are out- performing underlying economics.”

After weakening to a 12-year low of $ 1.0457 at the start of the week, the euro had secured a firm foothold back above $ 1.06 as it hit $ 1.0620 as U.S. traders began to arrive for the day.

The dollar meanwhile was down against a basket of major currencies as it added to its biggest drop in more than a month on Monday. Benchmark 2- and 10- year U.S. government bond yields also made it six days of declines in the last seven.

COMMODITIES CRUNCHED

Britain’s FTSE 100 was the only major index in Europe in positive territory in early afternoon European trading. Wariness over the Fed offset the effects of the bond-buying programme the European Central Bank began last week.

London was up a meagre 0.1 percent, but Frankfurt’s Dax dropped 1.2 percent and Paris’s CAC 40 lost 0.8 percent. Italian and Spanish stocks both declined 1 percent.

The falls came despite German business confidence data from the ZEW institute seeing a fifth consecutive rise, largely thanks to the ECB’s efforts to stimulate the euro zone economy.

The region’s car makers, which have been flying along in the fast lane over the last nine months as the euro has dropped 25 percent, were among the day’s biggest losers, down 2.7 percent , as poor sales data saw them hit the skids.

A warning from rating agency Moody’s that a Greek exit from the euro would still have “serious consequences” also cast a shadow over the region.

That came as Greek Prime Minister Alexis Tsipras requested a meeting with top European leaders including German Chancellor Angela Merkel at this week’s EU summit, as his cash-strapped government, which has been locked in an ugly spat with Berlin in recent days, scrambles to stave off bankruptcy.

Chinese shares reached seven-year highs in Asia trading on hopes that the Chinese government would loosen policy to bolster its slowing economy. Japan’s Nikkei climbed to a 15-year high as the yen edged lower after the Bank of Japan maintained its stimulus and its optimistic assessment of the economy at its latest meeting.

Beijing’s use of monetary and fiscal policies to bolster the economy is identical to what happened in the U.S., when the Fed’s quantitative easing in 2009 caused U.S. stocks to soar, said Wu Wenzhe, fund manager at China International Management.

Despite the pause in the U.S. dollar, Brent oil fell towards $ 53 a barrel in choppy trade, copper tumbled 1.8 percent, gold buckled and fellow precious metal platinum slumped to a 5 1/2-year low.

“The sentiment around platinum is quite negative. It’s a combination of supply coming back online after the strikes last year and it’s certainly getting no support from the gold market,” said ANZ analyst Victor Thianpiriya.

(Editing by Ralph Boulton)

Asian shares rise as South Korea cuts rates, euro sags

By Lisa Twaronite and Hideyuki Sano

TOKYO (Reuters) – A surprise interest rate cut by South Korea’s central bank on Thursday helped lift an index of Asian stocks away from the previous session’s seven-week trough, while the euro plumbed a new 12-year low as the European Central Bank’s easing pressured euro zone bond yields.

Financial spreadbetters predicted some of Asia’s luster would rub off in Europe, with Britain’s FTSE 100 <.FTSE> seen opening 11 points higher, or up 0.2 percent; Germany’s DAX <.GDAXI> expected to open 44 points higher, or up 0.4 percent; and France’s CAC 40 <.FCHI> seen opening 7 points higher, or up 0.1 percent.

“Despite a marginally weaker U.S. session, European traders are shrugging it off and instead focusing on the bullish session in Asia,” Jonathan Sudaria, a dealer at Capital Spreads, said in a note.

The Bank of Korea’s monetary policy committee cut its base rate <KROCRT=ECI> by 25 basis points to a record low of 1.75 percent, its first cut in five months. It joined its counterparts in other countries which have recently taken advantage of lower inflation to ease monetary policy to spur sluggish growth.

The Bank of Thailand cut its policy interest rate on Wednesday, also a surprise step, and India has cut rates twice this year. China has eased policy twice, with more moves expected, while Singapore, Australia and Indonesia have also eased.

MSCI’s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> extended gains and was up 0.7 percent, moving away from Wednesday’s seven-week lows.

The Korea Composite Stock Price Index (KOSPI) <.KS11> initially rose, but then fell 0.5 percent. A snap poll conducted by Reuters soon after the decision showed most analysts do not see another rate cut this year.

Japan’s Nikkei <.N225> ended up 1.4 percent at a 15-year closing high, as traders positioned for Friday’s settlement for Nikkei futures and options contracts expiring in March.

“Foreign derivatives investors are seen chasing the market higher,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, who said investors with long positions in Nikkei futures would like to see futures settle at a higher price.

EURO’S WOES CONTINUE

The euro touched a fresh 12-year low of $ 1.0494 on Wednesday and was last at $ 1.0537 <EUR=>, down about 0.1 percent on the day after the European Central Bank started to implement its 1 trillion euro bond-buying program this week.

The common currency has fallen about 4.8 percent in the past five sessions – a pace of decline not seen even during the European debt crisis of 2011-12.

By contrast, surprisingly strong U.S. employment data published last Friday fueled expectations that the Federal Reserve may raise interest rates as soon as June, though some investors and analysts fear the economy is not yet ready for even marginally higher borrowing costs.

The monetary policy divergence prompted many market players to shift funds to higher-yielding U.S. dollar from euro.

The dollar index <.DXY> <=USD>, which tracks the U.S. currency against a basket of six major rivals, hit a high of 100.06 on Thursday, breaking the 100.000 figure for the first time since April 2003. It was last down about 0.1 percent at 99.672.

The dollar edged down about 0.1 percent against the yen to 121.29 <JPY=> but remained not far from a nearly eight-year high of 122.04 yen hit on Tuesday.

The dollar’s strength undermined U.S. shares on Wednesday, on concerns it would erode multinational companies’ earnings. The S&P 500 Index <.SPX> fell 0.2 percent to a one-month low overnight.

Another downside of the dollar’s strength and the specter of higher U.S. rates is that they risk unsettling the many emerging markets that have benefited from investors seeking higher yielding investments.

Currencies such as the Turkish lira <TRY=> and the South African rand <ZAR=> have fallen almost as much as the euro so far this month. The Brazilian real fell about twice as much as the euro.

“We should take note of the risk that emerging currencies could fall further. … Some emerging countries are running current account deficits and their currencies falling would be negative for risk asset markets,” Makoto Noji, senior strategist at SMBC Nikko said in report.

U.S. crude prices <CLc1> rebounded after skidding to a one-month low overnight after government data showed a U.S. oil inventory build last week, contrary to some expectations for a drawdown. It last stood at $ 48.42 a barrel, up about 0.5 percent on the day.

The European benchmark Brent <LCOc1> also touched a one-month low overnight, though it bounced back later on Wednesday and added 2 percent. It was extending that rally in Asia, up about 1.1 percent at $ 58.18 a barrel.

(Additional reporting by Ayai Tomisawa in Tokyo; Editing by Kim Coghill and Jacqueline Wong)

Currencies: Surprise China rate cut pushes dollar higher

LONDON (MarketWatch) — The dollar shrugged off a slate of weak economic data Monday to trade higher against the euro, yen and pound, benefiting from a surprise rate cut from the People’s Bank of China.

The central bank cut its benchmark lending and deposit rates by a quarter of a percentage point on Saturday, raising concerns about flagging growth in the world’s second-largest economy.

Th move highlighted the divergence between the U.S. economy and economies in Asia and Europe, said Jameel Ahmad, chief market analyst at FXTM.

“At a time when so many central banks are shifting stance and unexpectedly easing monetary policy, optimism that the Federal Reserve will still be raising US interest rates at some point this year is enough to support the USD uptrend,” Ahmad wrote.

The euro EURUSD, -0.12%  fell to $ 1.1195, flat compared with its Friday-afternoon value of $ 1.1198. The buck USDJPY, +0.38%  traded at 120.08 yen, its highest level in nearly three weeks. It traded at ¥119.63 Friday. The pound GBPUSD, -0.48%  traded at $ 1.53, compared with $ 1.54 Friday.

Personal spending declined more than expected in January, which could weigh on gross domestic product growth, if consumer spending doesn’t pick up in March, Ahmad wrote.

The dollar shrugged off a report from the Institute for Supply Management showing that its manufacturing index fell to 52.9% in February, a fourth monthly decline. Economists polled by MarketWatch expected a reading of 52.8%.

The ICE U.S. Dollar Index, a measure of the greenback’s strength against a trade-weighted basket of six rival currencies, DXY, -0.05%  rose 0.1% to 95.37.

The greenback finished February higher against the euro for the eighth straight month.

Asia edges up after China rate cut, euro sags

By Shinichi Saoshiro

TOKYO (Reuters) – Asian stocks got off to a steady start on Monday as soft U.S. data was partially offset by a weekend interest rate cut by China, while the dollar hit a five-week high against the euro.

MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.1 percent and Tokyo’s Nikkei rose 0.3 percent. South Korean and Australian shares also gained.

China on Saturday stepped up its easing tempo and cut its lending and deposit rates as the world’s second largest economy tries to ward off deflation.

But the impact from the weekend easing only had a limited effect on the region’s markets.

“News of China’ rate cut should help buyer mood this morning, compensating for a weak lead from the US market,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.

“However, while news of lower borrowing costs will help support equity valuations and be seen as a positive for commodity demand, market response may be limited. In some senses this rate cut is a technical response to the fact that lower inflation is making real borrowing costs more expensive in China,” Spooner said.

Equity markets were also cautious after revised data on Friday showed U.S. gross domestic product expanded at a slower pace in the fourth quarter than initially thought, and the University of Michigan’s final February reading on U.S. consumer sentiment slipped from an 11-year high but topped expectations.

The impact of China’s easing on the Australian dollar, often used as a proxy for Chinese growth prospects, was also limited. The Aussie climbed to $ 0.7850 early in the session before losing steam to last trade at $ 0.7791, down 0.2 percent.

The U.S. dollar was up 0.1 percent at 119.81 yen after gaining about 0.6 percent last week when upbeat U.S. data helped revive prospects of an early interest rate increase by the Federal Reserve. A rise above 119.84 would take the dollar to a three-week high.

The euro hovered near a five-week low of $ 1.1160.

In addition to the all-important U.S. non-farm payrolls data on Friday, the key focus this week will be the European Central Bank (ECB) meeting on Thursday. Investors are keenly waiting for further details on its 1 trillion euro ($ 1.1 trillion) government bond-buying program, which begins this month.

U.S. crude fell 41 cents to $ 49.35 a barrel after Friday’s $ 1.59 surge petered out. U.S. crude posted the first monthly gain since June thanks to an improving demand outlook and supply outages. [O/R]

(Editing by Shri Navaratnam)

Asia stocks slip on Greece worries, oil holds gains after rally

By Marc Jones

LONDON (Reuters) – Nerves over Greece’s future in the euro and the conflict in Ukraine dragged on European markets on Tuesday, while bets on the likelihood of a U.S. interest rate hike nudged the dollar higher and oil prices held steady after a rebound.

European stocks fell 0.3 percent and the euro slipped towards $ 1.13 ahead of what is set to be a tense, Greece-dominated meeting of euro zone finance ministers on Wednesday.

The global disinflation/deflation story was also back on investors’ radar as Chinese inflation fell below 1 percent to its lowest in five months, drawing talk of further easing from China’s central bank, the PBOC.

That had sent shares in Shanghai up more than 1 percent, though other Asian stocks eased on more generalised risk aversion.

Commodity price-dependent currencies such as the Australian dollar (AUD=D4) and Norwegian crown ( EURNOK=) got a lift from the talk of China stimulus, but for many traders the main focus remained the dollar (.DXY) as it nudged up again.

“We are just wondering what the status is on this dollar move as U.S. rates (bond yields) rise,” Saxo Bank’s head of FX strategy, John Hardy, said.

“We had the big move on Friday after the strong jobs numbers but then yesterday everything went quiet so hopefully it will rally today to show that there is something behind it.”

On the strains on the euro, Hardy pointed out that markets appear relatively pragmatic about a potential exit of Greece from the 19-member currency bloc.

Although Greek markets have been hit hard – benchmark Greek bond yields remain above 10.75 percent – the euro performed relatively well against currencies other than the dollar. There has been limited impact on Spanish and Italian bond markets.

Britain’s finance minister George Osborne, however, warned on Tuesday that the risk of a “very bad outcome” was growing between Greece and the euro area. Britain is not a member but trades heavily with Europe.

STIMULUS, OIL

Asian share markets had ended mostly lower with Japan’s Nikkei (.N225) down 0.8 percent and shares in Australia and South Korea also off, leaving MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.25 percent.

Chinese inflation data had again shown signs of weakness in the world’s No. 2 economy as consumer price inflation hit a five-year low of 0.8 percent year-on-year in January. (ECONCN)

It adds to a huge global trend which is pressing central banks in many parts of the world to lower interest rates or turn to unconventional policy stimulus again.

“This will likely be the low point for CPI inflation given that oil is rebounding. Still, the data will increase rate cut expectations and we see a cut in March,” Credit Agricole senior economist in Hong Kong, Dariusz Kowalczyk, said.

According to a draft communique from leaders of the Group of 20 (G20) countries meeting in Istanbul, they will pledge to act decisively on monetary and fiscal policy, if needed, to combat the risk of persistent stagnation.

The United States, however, strongly underlined at the meeting that countries should not to use their currencies to try to boost exports, one U.S. Treasury official said in a thinly veiled reference to what is fast becoming a global currency war.

The dollar rose 0.15 percent to 118.78 yen (JPY=), having hit 119.23 on Friday in a rally triggered by robust U.S. non-farm payrolls. It was also up 0.3 percent against the top six world currencies. (.DXY)

Among commodities, safe-haven gold dipped and crude oil snapped three days of gains after a survey showed that U.S. commercial crude stockpiles hit a record high last week.

It jumped on Monday as OPEC forecast greater demand this year than previously thought and projected less supply from countries outside the producer group. [O/R]

U.S. crude was down 1.3 percent at $ 52.45 a barrel (CLc1) after gaining 2.3 percent overnight. Brent (LCOc1) was 0.6 percent lower at 57.97 percent.

(Editing by Louise Ireland)

Asia shares edge up on steady Wall Street, euro clings to gains

By Shinichi Saoshiro

TOKYO (Reuters) – Asian stocks crept up on Thursday following another steady performance by Wall Street shares which hovered near record highs, while the euro clung to modest gains after rebounding from 13-month lows.

The Australian dollar rose to a three-week high versus the U.S. dollar after second quarter business investment data beat forecasts.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 percent.

Tokyo’s Nikkei shed 0.5 percent, weighed by overnight gains in the yen.

The S&P 500 crept up to another record closing high overnight, with U.S. stocks supported by brighter prospects for the economy.

The euro received some reprieve after three sessions of losses as feverish speculation of an imminent round of easing by the European Central Bank was tempered for now.

Sources told Reuters on Wednesday that the ECB is unlikely to take new policy action next week unless inflation figures on Friday show the euro zone sinking significantly towards deflation.

The euro gained 0.2 percent to $ 1.3216 , creeping up from a one-year low of $ 1.3152 plumbed on Wednesday.

The markets looked to the German inflation data due later in the session, which foreshadow the closely watched euro zone inflation figures due Friday, to see whether the euro can extend its rebound or continue probing fresh lows.

“If the German CPI underlines strengthening deflation, it will fuel caution towards the euro zone consumer data due tomorrow and add selling pressure on the euro,” said Junichi Ishikawa, a market strategist at IG Securities in Tokyo.

Euro zone inflation figures on Friday are expected to show the annual rate dipping to 0.3 percent in August from 0.4 percent.

The dollar slipped 0.1 percent to 103.785 yen , having pulled back from a seven-month peak of 104.49 struck at the start of the week.

The greenback has so far failed to build a steady foothold above 104 yen, partly due to persistently low U.S. yields.

U.S. Treasuries rallied overnight, driving yields lower, as European government bond yields continued to probe record lows and month-end buying helped send 30-year Treasury yields to their lowest levels in over a year. [US/]

The Australian dollar gained in response to stronger-than-expected second quarter business investment which leant hope the antipodean country’s economy could weather an ongoing pullback in the once-booming mining sector.

The Aussie rose about a quarter of a cent to an intraday peak of $ 0.9373, its highest in three weeks.

“There are two parts of the growth transition, a pick-up in residential construction, which has been confirmed … and a pick-up in the non-mining capex side of things, and that’s where the big question mark was. These numbers today suggest prospects in that area are looking quite encouraging,” said Michael Blyth, chief economist at the Commonwealth Bank of Australia.

In commodities, U.S. crude oil dipped after choppy trading overnight following a report that showed declining U.S. gasoline demand. [O/R]

U.S. crude dipped 2 cents to $ 93.86 a barrel with the market looking to U.S. economic data due later in the session to gauge the outlook for demand in the world’s largest oil consumer.

Spot gold edged up as a lower dollar and lingering geopolitical tensions helped offset selling pressure from bullish U.S. equities. [GOL/]

Spot gold gained 0.3 percent to $ 1,286.01 an ounce.

(Additional reporting by Wayne Cole in Sydney; Editing by Eric Meijer)

Asia shares mostly up after Yellen speech

Asian markets mostly rose Monday, while the dollar hit multi-month highs against the yen and euro after the US Federal Reserve chief seemed to indicate a shift towards an interest rate rise sooner than expected.

While Janet Yellen’s speech Friday said slackness in the jobs market would likely staunch inflation, investors noted her acknowledgement of calls for an early rate rise. Analysts said this may suggest she is thinking of such a move.

Tokyo climbed 0.28 percent, or 74.06 points, to 15,613.25 and Seoul put on 0.20 percent, or 4.19 points, to end at 2,060.89. Hong Kong gained 0.22 percent, or 54.68 points, to close at 25,166.91.

However, Sydney shed 0.19 percent, or 10.7 points, to 5,634.9 and Shanghai dipped 0.51 percent, or 11.54 points, to 2,229.27.

Speaking at the Fed’s annual symposium in Jackson Hole, Wyoming, Yellen said even if unemployment has fallen more quickly than expected to 6.2 percent, there remains “considerable uncertainty about the level of employment”.

That signalled her commitment to the Fed’s timetable for raising rates late next year, rather than earlier as some analysts and policymakers would like.

However, Junichi Ishikawa, market analyst at IG Securities in Tokyo, told Dow Jones Newswires: “Her comments at Jackson Hole were balanced, and took into consideration the positions of the more hawkish members of the Fed.”

And Kathleen Brooks at Forex.com said dealers took account of the uncertainty surrounding labour market indicators which Yellen mentioned in her speech. “The market seems to perceive this indecision to be a subtle shift away from the ultra-dovish stance Yellen has taken in the past,” she said.

Yellen’s comments pushed the dollar above 104 yen for the first time since April and to the strongest level since January.

In afternoon Tokyo trade the greenback bought 104.10 yen compared with 103.87 yen in New York Friday.

The Dow eased 0.22 percent Friday and the S&P 500 shed 0.20 percent. The Nasdaq added 0.14 percent.

The euro was at $ 1.3190 — just shy of an 11-month low against the dollar — and 137.27 yen, against $ 1.3241 and 137.60 yen.

On oil markets, US benchmark West Texas Intermediate for October eased 11 cents to $ 93.54 while Brent crude for October tumbled 14 cents to $ 102.15.

Gold traded at $ 1,276.97 an ounce at 0810 GMT compared to $ 1,281.40 an ounce late Friday.

In other markets:

— Taipei edged up 0.11 percent, or 10.52 points, to 9,390.62.

Taiwan Semiconductor Manufacturing Co was 0.4 percent lower at Tw$ 125.0, while Hon Hai Precision was up 0.45 percent at Tw$ 110.5.

— Wellington rose 0.30 percent, or 15.75 points, to 5,182.74.

Air New Zealand was up 1.41 percent at NZ$ 2.16 and Trade Me rose 1.09 percent to NZ$ 3.72.

— Manila was closed for a public holiday.