U.S. Dollar Rebounds After Falling for Fourth Straight Session

U.S. Federal Reserve Chairman Jerome Powell speaks at the American Economic Association  Allied Social Science Association 2019 meeting in Atlanta

U.S. Dollar Rebounds After Falling for Fourth Straight Session

The dollar fell to the lowest in more than two months against peers. Technology and consumer discretionary shares led gains.

On Friday, U.S. non-farm payrolls data showed the world's largest economy added 312,000 net new jobs in December, while wages rose at a brisk annual pace of 3.2 percent, both way above expectations.

On Friday, 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 the markets are pricing in.

The crude benchmark rose 54 cents on Monday to $57.61 a barrel, while USA crude futures gained 53 cents to $48.49. "Maybe, people have already started buying", Ikemizu said. "I do think going forward you are probably not likely to see that type of move where equities sell off 20 percent in the space of six weeks, but generally volatility will be higher than what you saw in 2017 and the first half of 2018".

Felix Lam, a portfolio manager at BNP Paribas Asset Management, said policy makers in the world's two largest economies had helped lift market sentiment, but the key question mark was whether the two countries could reach a trade deal. Even after the slump in Treasuries at the end of last week, 10-year yields remain more than 50 basis points lower than where they peaked in November.

The gains extended Friday's rise following robust USA employment data and a message from the Federal Reserve that it would be patient and flexible in policy decisions this year. Apple Inc. last week cut its revenue outlook for the first time in nearly two decades, citing weakness in China's economy as one of the reasons. Oil extended its recent rebound to trade back above $48 a barrel.

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Asian shares sped ahead on Monday as a dovish turn by the Federal Reserve and startlingly strong U.S.jobs data soothed some of the market's worst fears about the global outlook. Powell will speak to the Economic Club of Washington D.C. on Thursday.

The gain was mostly led by the Australian dollar, which posted a surge of 1.78 percent against USA dollar.

China's Shanghai Composite advanced 0.7%. South Korea's Kospi climbed 1.3%, Australia's S&P/ASX 200 benchmark rose 1.1% and Hong Kong's Hang Seng Index rose 0.8%. The Australian dollar extended gains of almost 0.4 percent against the greenback.

"With the dollar softening following Powell's speech and U.S. 10-year bond yields well off their highs, this has helped the yuan shrug off the RRR cut and strengthen", said Khoon Goh, head of research at Australia & New Zealand Banking Group in Singapore.

The euro advanced 0.22 percent versus the dollar while the Australian dollar, often considered a barometer of global risk appetite, rose 0.2 pct and touched its highest level since December 20.

Spot palladium hit a record high at $1,313.24 per ounce on Monday and was trading at a premium to gold.

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