By:DailyForex.com
The U.S. dollar retreated from 7-week lows against the yen and the euro during Wednesday’s Asian session in response to the New York Federal’s Reserve’s hawkish comments on Tuesday. U.S. markets closed lower on Tuesday while Asian markets opened mixed on Wednesday. The dollar rose slightly in the morning to 100.530 yen, rising just after hitting 99.550, the currency’s lowest point since the Brexit on June 24th.
New York Fed President William Dudley said that as the U.S. labor market tightens and as evidence of rising wages builds, "we're edging closer toward the point in time where it will be appropriate I think to raise interest rates further." Atlanta Federal Reserve Bank President Dennis Lockhart voiced agreement with Dudley’s sentiment, saying that he believes the time is coming where it will be “appropriate” to raise interest rates.
Junichi Ishikawa, Forex analyst at IG Securities in Tokyo, however, has noted that this movement isn’t likely to signal a long-term trend. “Hawkish views from Fed officials can prompt short covering in the dollar, but they are not likely sufficient enough to kick off an uptrend,” he said.
In the commodities markets, oil prices dropped again during Wednesday’s Asian session after a rise of nearly 2 percent on Tuesday, following the weakened dollar. Brent dropped down to $48.85 a barrel, a 0.77 drop after a 1.8 percent increase overnight. U.S. crude also dropped on Wednesday following a 1.8 percent increase on Tuesday, hitting $46.26 a barrel.