Dollar eases in run-up to Fed decision; pound briefly rallies above $1.36

As a result, market odds for a December hike jumped, with futures markets showing the probability above 54 percent on Friday, up from 31 percent the week before.

At 10:59 a.m. ET (1459 GMT), the Dow Jones Industrial Average was up 71.16 points, or 0.32 percent, at 22,339.5, the S&P 500 was up 5.83 points, or 0.233179 percent, at 2,506.06 and the Nasdaq Composite was up 20.94 points, or 0.32 percent, at 6,469.41.

In the Asian trading, the NZ dollar fell to 81.40 against the yen and 1.0978 against the Australian dollar, from an early more than a 6-week high of 81.86 and a 4-week high of 1.0921, respectively.

The Federal Open Market Committee ends its highly-anticipated two-day meeting on Wednesday and is expected to announce it will begin the well-telegraphed unwinding of its balance sheet while keeping its key rate steady. The Fed is expected to hold rates at 1.25 percent.

Meanwhile the focus of USD investors will of course be on the upcoming Fed rate decision this week, however the US Dollar could still see some movement overnight on Tuesday as the US releases it latest export price figures.

Analysts said despite the expected rise in borrowing costs, investors were still piling into equity markets on renewed hopes that Trump can push through the market-friendly policies that helped drive a global rally at the start of the year.

Markets have priced in a zero chance of change to USA interest rates, but near-certainty to the Fed beginning to unwind its $4.5 trillion balance sheet, a process it previously said it would begin "relatively soon".

Manchester Utd thrash Everton, Chelsea and Arsenal draw
Arsenal midfielder Aaron Ramsey told Sky Sports: "We needed that against a top team". Both sides had their chances and Arsenal even had a goal ruled out for offside.

Investors will be keeping a close watch on the United States central bank as policymakers have to deal with the fallout from hurricanes Harvey and Irma, which hammered the country and are expected to hit economic growth.

On Tuesday, The US President, Donald Trump, worsened his altercation with North Korea across its nuclear encounter, sending intimidation that'll "totally destroy" the country and making a mockery of its leader, Kim Jong Un calling him as a "rocket man".

The greenback weakened to an 8-day low of 0.8048 against the aussie and a 1-1/2-month low of 0.7375 against the kiwi, off its early highs of 0.7999 and 0.7303, respectively.

However, long-term yields in the USA are not immune to the effect of low-yielding bonds in other developed countries like Germany and Japan.

But economists and Fed officials say the storms will not affect the underlying trend in growth, which has been steady at around two percent in recent years, and activity should rebound later in the year due to reconstruction efforts. The euro strengthened to $1.1968 from $1.1945.

Shanghai gained 0.1 percent, while Singapore and Sydney each gained 0.2 percent.

HURRICANE IMPACT: The National Association of Realtors said that sales of previously occupied US homes fell 1.7 percent in August. Brent crude slipped 0.1 percent to $55.42, not far from an nearly five-month high of $55.99 marked on Thursday.

  • Darren Santiago