US Federal Reserve plans rate hike this month: Evercore ISI

James Bullard says there no good reason why the Fed's balance sheet is so big

James Bullard says there no good reason why the Fed's balance sheet is so big

Gold prices slipped on Thursday after the dollar firmed on hawkish comments from U.S. Federal Reserve officials that stoked expectations of a U.S. interest rate hike in March.

Economists expect next Friday's employment report to show an increase of 186,000 nonfarm payrolls.

She acknowledged that waiting too long to raise rates could mean the Fed has to hike more rapidly at some point, which "could risk disrupting financial markets and pushing the economy into recession". As the March hike expectation reached 90 percent last night, the market participants also fast forwarded their hike expectations in terms of meeting.

Investors shifted into the USA unit after New York Federal Reserve president William Dudley said there was a strong case for borrowing costs to rise, while his San Francisco counterpart John Williams expects such a move to get "serious consideration" when the bank meets this month.

"Investors liked that Trump was behaving well during his speech although it lacked specifics in policies", said Daiwa's Ishizuki.

Mexico's peso rallied to a almost four-month high after the new U.S. Secretary of Commerce Wilbur Ross offered support to the battered currency and said Mexico and the United States could reach a mutually beneficial trade deal.

The US Federal Reserve would probably raise its benchmark interest rate this month, Evercore ISI said, switching its call from May previous year.

US Strikes in Yemen Target al-Qaida in the Arabian Peninsula
Chief Petty Officer William "Ryan" Owens, 36, was killed in the raid, as were civilians, reportedly including an 8-year-old girl. A number of civilians were also killed in the battle, something the Pentagon has acknowledged and is investigating.

The U.S. two-year yield hovered near a more than seven-year high of 1.308 percent touched on Wednesday. The 10-year Treasury yield held steady at 2.48%.

Brainard's words came after New York Fed President William Dudley and San Francisco Fed President John Williams both expressed support for a rate-hike in the near future on Tuesday. In addition to a stronger United States dollar, USA bond yields also increased over night due to the hype around a Fed move. The consensus priced in about a 34% chance as late as February 23, according to the World Interest Rate Probability data provided by Bloomberg.

Investors will be listening for clues Friday on whether the central bank will raise interest rates again later this month.

The greenback hovered near a six-week high versus the loonie, last standing at 1.3356 Canadian dollar.

Snap Inc, which rallied Thursday in its debut, jumped another 10.7 percent after NBCUniversal invested $500 million in the parent of Snapchat. The common currency dipped to a one-week low of $1.0514 against the dollar on Wednesday.

Australian shares were off 0.3 per cent, slightly paring losses as gross domestic product data confirmed the economy returned to growth in the fourth quarter.

Australia's trade surplus shrank unexpectedly in January, though the quarterly current account might still edge into the black for the first time since the mid-1970s.

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