Investing.com - The dollar rose against the euro and the yen on Friday as comments from a senior Federal Reserve official indicated that the central bank could still raise interest rates next month despite the recent turmoil in global markets.
The dollar found support after Fed Vice Chairman Stanley Fischer said it was still too early to determine whether to raise short-term interest rates from near zero, where they have been held since December 2008, at the bank’s September meeting.
The euro fell to the day’s lows following the remarks indicating that a rate hike is still on the table, with EUR/USD down 0.51% to 1.1187 in late trade.
USD/JPY extended gains, rising 0.56% to 121.69.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.42% to 96.15 in late trading.
The index ended the week up 1.2% after rebounding from the seven-month trough of 92.52 set on Monday amid a broad based selloff in global financial markets.
The dollar had weakened as fears over a slowdown in growth in China roiled global markets, with equities and commodities the hardest hit. Fears over China also prompted investors to push back expectations on the timing of an initial rate hike by the Fed.
But market sentiment improved after Beijing moved to ease monetary policy in order to shore up growth. China's central bank lowered interest rates for the second time in two months on Tuesday.
The dollar received an additional boost after data on Thursday showed that the U.S. economy grew at a faster than expected rate in the second quarter.
In the week ahead, investors will be focusing on Friday’s U.S. jobs report for August, which could help to provide clarity on the likelihood of a near-term interest rate hike.
Markets will also be watching surveys of the manufacturing and service sectors, factory orders and trade data from the world’s largest economy for fresh indications on the timing of a rate hike.
Central bank meetings in the euro zone and Australia will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, August 31
New Zealand is to release private sector data on business confidence.
Australia is to report on company operating profits.
The euro zone is to produce preliminary data on consumer price inflation, while Germany is to publish data on retail sales.
Switzerland is to publish its KOF economic barometer.
Canada is to report on the current account.
The U.S. is to release figures on manufacturing activity in the Chicago region.
Tuesday, September 1
China is to release reports on manufacturing and service sector activity from the China Federation of Logistics and Purchasing, as well as the Caixin services index and the revised reading of the Caixin manufacturing index.
Australia is to publish data on building approvals and the current account.
The Reserve Bank of Australia is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
The euro zone is to publish the unemployment rate, while Germany is to report on the change in the number of people unemployed.
The U.K. is to publish reports on manufacturing activity and net lending.
Canada is to release its monthly report on economic growth.
In the U.S., the Institute of Supply Management is to report on manufacturing growth.
Wednesday, September 2
Australia is to publish data on second quarter gross domestic product.
In the euro area, Spain is to report on the change in the number of people unemployed.
The U.K. is to publish data on construction sector activity.
The U.S. is to release the monthly ADP nonfarm payrolls report, as well as data on factory orders.
Thursday, September 3
Australia is to publish reports on retail sales and the trade balance.
The U.K. is to report on service sector activity.
The euro zone is to release data on retail sales.
The European Central Bank is to announce its monetary policy decision. The rate announcement will be followed by a post-policy meeting press conference with President Mario Draghi.
Both the U.S. and Canada are to release data on their respective trade balances. Ina addition, the U.S. is to publish figures on jobless claims and the ISM is to report on service sector growth.
Friday, September 4
Japan is to release figures on average cash earnings.
Germany is to report on factory orders.
Canada is to publish its monthly employment report.
The U.S. is to round up the week with the closely watched nonfarm payrolls report, and data on wage growth.