Dollar hit as traders pull September US rate hike bets – AFP

dollar to naira

The dollar retreated Tuesday as traders rowed back their bets on a September US interest rate hike after a top Federal Reserve official cautioned against moving too early.

Governor Lael Brainard argued that the bank should adopt a “moderate and gradual” approach to borrowing costs and avoid moves to “tighten policy pre-emptively.”

Her comments stood in contrast to two Fed officials who signalled late last week that a rate hike could be justified as soon as this month. Those remarks sent global markets reeling, with US and European shares plunging Friday and Asia tanking Monday.

“Investors seem close to certain that the Fed will forgo a rate hike next week, and that’s weighing on the dollar,” Etsuko Yamashita, chief economist at Sumitomo Mitsui Banking, told Bloomberg News.

The dollar was at 101.93 yen, slightly stronger than 101.85 yen on Monday in New York, but still down from levels around 102.50 yen earlier Monday in Asia. The euro fetched $1.1235 against $1.1234

The greenback fell against most other Asia-Pacific currencies. The Australian dollar, Indonesia’s rupiah and Malaysian ringgit each climbed 0.5 percent while the Thai baht gained 0.3 percent and the Singapore dollar put on 0.2 percent.