Dollar skids as USA rate pause bets weigh

Dollar skids as USA rate pause bets weigh

After a slew of weaker-than-expected manufacturing data, Chinese authorities on Friday cut reserve requirements for all banks by 100 basis points.

The Federal Reserve may only need to raise interest rates once in 2019, Atlanta Fed President Raphael Bostic said on Monday, focusing on business executives' nervousness about the economy and a global slowdown as factors that may hold the USA central bank back.

USA gold futures were also steady at $1,289.50 per ounce. Last week, amid intense pressure from USA policymakers including the United States president Donald Trump, the U.S. central had to step away from its much-debated monetary policy and interest rate hike, despite the inflation target had been closer to central bank's target (1.90 percent while the target was 2 percent).

The Aussie. gained 0.28 percent to $0.7123.

Risk appetite got a huge boost on Friday when the USA payrolls report showed 312,000 net new jobs were created in December, while wages rose at a brisk annual pace of 3.2 percent.

On Friday, Mr Powell told the American Economic Association that the Fed is not on a preset path of interest rate hikes and that it will be sensitive to the downside risks markets are pricing in. Bostic, who is not a voting member of the Federal Open market Committee this year, said the Fed may only need to raise rates once in 2019.

Benchmark 10-year notes US10YT=RR shed 2/32 in price to yield 2.6640 percent, from 2.659 percent on Friday.

Powell has another speech on Thursday to expand on his thinking, while there are at least eight other Fed officials scheduled to speak this week.

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In any case, Friday was a strong session for Wall Street, with the Dow recording gains of 3.29 percent, while the S&P 500 jumped 3.43 percent and the Nasdaq 4.26 percent.

Analysts at Bank of America Merrill Lynch noted global equity markets had lost $19.9 trillion since January a year ago, and a record $84 billion had flowed out of stocks in just the past six weeks.

In late NY trading, the euro was up to 1.1478 dollars from 1.1398 dollars in the previous session, and the British pound was up to 1.2769 dollars from 1.2740 USA dollars in the previous session.

The U.S. dollar bought 108.60 Japanese yen, higher than 108.52 Japanese yen of the previous session.

The latter had already received a boost from news Sino-U.S. trade talks were back on, as well as a natural bounce from the wild "flash crash" that rocked markets last week.

The British pound changed hands at US$1.2787, gaining 0.05 per cent on the USA dollar. The euro was firmer at $1.1413, while the dollar index eased a touch to 96.102.

Global foreign exchange market embraced the first day of the week with bumpy trading as fewer interest rate hikes later would lead to more hot money flowing in the market. The crude benchmark rose 135 cents on Monday to $58.42 a barrel, while US crude futures gained 111 cents to $49.07.

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