The US Dollar Index edged higher on Tuesday touching a high of 97.50, the index which measures the greenbacks strength against six major currency pairs has moved close to 1% in the past two days and has shrugged of comments from Fed member Clarida on interest rate talk.
The Federal Reserve’s second-in-command has backed interest rates hikes but stressed that monetary policy is not a pre-set course. He mentioned that interest rates were closer to neutral but there is no agreement at the FOMC about ‘how close’ to neutral they are. He said hikes should be dependent, noting that it was important to see capex rebound after a soft result in Q3. In a separate speech Atlanta Fed President Raphael Bostic said the central bank "is not too far" from a neutral interest rate and “neutral is where we want to be”. The Fed has raised rates three times this year and is expected to increase again in December. While the market has priced in each of those hikes, there remains a disparity between traders and the Fed over what is ahead.
US equities finished the session higher, the Dow Jones Industrial Average added 108.49 points, or 0.44%, to 24,748.73, the S&P 500 rose 8.67 points, or 0.32%, to 2,682.12 and the Nasdaq Composite gained 0.85 points, or 0.01%, to 7,082.70.
On the commodity front, Gold has dropped suffering the worst decline in 2-weeks. The yellow metal touched a low of $1,211.80 which was triggered by a stronger greenback. Oil held its ground overnight, with the WTI oil price slipping US$0.20 to US$51.50 per barrel.
Looking ahead, a plethora of data out; Federal Reserve Chairman Powell will be delivering a speech at the economic club of New York. We also have Preliminary GDP, Goods Trade Balance, Wholesale Inventories, New Home Sales and Richmond Manufacturing Index.