Dollar edges up, as investors wait on US Fed, Jackson Hole

An employee of a bank counts US dollar notes at a branch in Hanoi. Image Source: Reuters

The US dollar edged up on Wednesday, moving off lows touched against the yen overnight, as markets looked to a gathering of global central bankers in Jackson Hole, Wyoming for clues on whether the Federal Reserve is poised to hike interest rates again.

Data on Tuesday showed new US single-family home sales unexpectedly rose in July, reaching their highest level in nearly nine years as demand increased broadly, brightening the housing market outlook.

At the end of the week, US Fed Chair Janet Yellen is scheduled to address the central bankers gathered for the annual mountain retreat that begins on Thursday.

Recent hawkish comments from Fed Vice Chairman Stanley Fischer and New York Fed President William Dudley have raised some investors' expectations that Yellen might also take a less cautious tone.

The dollar inched 0.1% higher to 100.30 yen after nudging below 100 yen overnight to 99.925.

The dollar index, which tracks the US unit against a basket of six major rivals, was up 0.1% at 94.593.

News that North Korea fired a submarine-launched missile had little impact on foreign exchange trading. The missile flew about 300 miles (480 km) before splashing into the Sea of Japan, a US defence official said on Tuesday.

"It could have been an excuse for some people to trade, but it wasn't a major factor," said Mitsuo Imaizumi, chief currency strategist at Daiwa Securities.

Instead, markets are waiting for Jackson Hole, for any fresh signals on the US monetary policy outlook.

"The number two, number three officials have spoken. Will what she says be different?" Imaizumi said.

But minutes from the Fed`s July 26-27 policy meeting showed officials were divided over whether to raise rates soon, with some insisting that more economic data were needed before any tightening.

The euro was flat against the greenback at $1.1304 , though it crept 0.1% higher against the yen to 113.44.

Data on Tuesday showed that surprisingly strong growth in France supported stable euro zone private business activity during August, underpinning the euro.

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