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Dollar pause as Fed officials warn about global growth, yen companies

SINGAPORE (Reuters) – The dollar slowed slightly compared to other key currencies on Monday after Federal Reserve officials expressed caution…

SINGAPORE (Reuters) – The dollar slowed slightly compared to other key currencies on Monday after Federal Reserve officials expressed caution over global growth prospects, which led operators to re-evaluate the rate of future US interest rate hikes.

PHOTO PHOTO: An American dollar note is seen in this illustration image on June 22, 201

7. REUTERS / Thomas White / Illustration

Greenback has had a strong run this year thanks to Fed’s constant political tightening on the back of a robust economy and rising wage pressures . A fourth rate increase for this year is expected next month and decision makers had announced another two in June 2019.

However, comments from Friday by Richard Clarida, Fed’s newly appointed vice president, made the test market expectations of a steady pace of tightening . Clarida warned of a slowdown in global growth and said “it is something that will be relevant” for the prospect of the US economy.

Federal Reserve Bank of Dallass President Robert Kaplan, in a separate interview with Fox Business, also said he saw a growth decline in Europe and China.

The comments can argue that Fed has set itself to slow down its monetary policy pace and prompted some traders to question whether the dollar’s rally reached its end, with the reference value in US 10-year interest-bearing interest rates withdrawing slightly.

New York Federal President John Williams will talk later on Monday and businessmen should wait to see if he echo the same theme as his colleagues.

“The market has definitely interpreted these statements as deaf. However, fed has always been data-raising and, in that sense, it should not come as a surprise,” said Michael McCarthy, Chief Marketing Officer at CMC Markets.

The dollar index, a meter of its value compared with six major comrades, traded marginally weaker at 96.45, contributing to a decline of 0.5 percent on Friday. The dollar index had hit a 16 month high of 97.69 on November 12.

The yen picked up 112.68 on The dollar lost slightly over the day. The dollar lost 0.9 percent compared with the yen last week when traders rushed into the Japanese currency dealer with concerns about US-Chinese trade tensions and political risks in Europe around Brexit and the Italian budget.

The euro slowed 0.1 percent in Asian trade, switching hands to $ 1,1403, which has advanced over the last four trading sessions despite weaker economic fundamentals.

The Gemen The same currency has risen 2.7 percent compared with the pound since November 13, as uncertainty about a smooth Brexit deal remains at the forefront.

“Euro has traded almost exclusively against dollar and risk appetite and we expect the same thing this week when the currency looks out of weakness in Germany’s PPI report or euro area PMI,” said Kathy Lien, Managing Director of BK Asset Management .

The British pound wobbled at $ 1,2832, which has been under heavy sales last week, among concerns about Britain’s Prime Minister Theresa Mays draft Brexit plan.

The currency is expected to remain under pressure until the market becomes clear about how the Brexit deal is progressing, “said CMC Markets McCarthy.

In the days since May presented a draft EU divorce agreement, May’s premiership has broken into crisis. Several ministers, including her Brexit minister, have resigned and some of her legislators try to abstain from her.

PHILPHOTO: US Dollars and Japan Yen notes are seen in this image, illustrating June 22, 2017. REUTERS / Thomas White / Illustration

With both pro-EU and pro-Brexit legislators dissatisfied with the draft agreement, it is not clear that she will be able to win Parliament’s support for it, which increases the risk of Britain leaving the EU without a deal.

The Australian dollar traded down 0.2 percent at $ 0.7317 because US-Sino trade tensions did not show any signs of decline.

China is Australia’s largest trading partner and negative feelings affecting the world’s second largest economy tend to undermine Aussie.

Reporting of Vatsal Srivastava; Editing Shri Navaratnam and Kim Coghill

Our Standards: Thomson Reuters Trust Principles.

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