Fed Chair Janet Yellen's hawkish talk in Washington Thursday no doubt added to the hoped for rise interest rates next month, the first one in a year. That and hopes the new administration headed to Washington will help stimulate spending. The yen traded at 110.45 compared with levels below 105.00 prior to the U.S. election results. In other markets, the Hang Send was up 0.17%, the ASX 200 0.31%, Kospi down -0.34% and the Shanghai composite off -0.32%.
Reuters reported that:"Yellen testified to Congress where she said in prepared remarks that a rate hike could be "appropriate relatively soon," and added there were dangers to waiting too long to tighten monetary policy. She added she would not step down from her position as the head of the Federal Reserve until the end of her term. Her comments pushed the dollar higher, with the dollar index, which measures the greenback against a basket of currencies, reaching a session high of 101.32.
However, shares in Asian emerging markets faced further selling pressure, with analysts expecting more declines given that rate increases will likely spur a flight of capital back to the U.S., as investors search for higher yields. In Indonesia, the Jakarta Composite Index JAKIDX, +0.15% was last down 0.5%, while the FTSE Bursa Malaysia Index FBMKLCI, -0.37% was off 0.3%. “I expect the broad selloff to continue in emerging markets in Asia because I feel if the rates in the U.S. are really going to go up, there is no point putting your money in risky countries,” one analyst noted.
Oil prices fell as hopes that members of the Organization of the Petroleum Exporting Countries could reach a deal to cut output at their Nov. 30 meeting took a dive. Brent crude, the global price benchmark, was last down 1.0% at $46.01 a barrel overnight. The strong dollar didn't help gold and other so-called safe haven investments as the yellow stuff $1,207.40 an ounce, down 0.80%.
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