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Dollar fluctuates and stocks are mixed before Fed

Sydney - The dollar swung while stocks were mixed as investors sifted through earnings ahead of the U.S. Federal Reserve’s policy decision. Oil extended gains.

The Bloomberg Dollar Spot Index reversed earlier losses after approaching the lowest level since May 2016. The MSCI Asia Pacific Index fluctuated near a 10-year high while European shares climbed following three days of declines.

Oil crept toward $47 a barrel after Saudi Arabia promised deep cuts to crude exports next month to help ease a global glut.

Earnings season is ramping up ahead of the eagerly anticipated Fed policy decision on Wednesday. Data on Monday in Europe cast doubt over the strength of the recovery and bond investors are reacting to a weak inflation outlook in the US While the Fed is expected to keep rates on hold, traders are looking for comments that it could make on its balance-sheet reduction plan.

Political turmoil in Washington remains front and center after senior adviser Jared Kushner said he had no improper contacts with Russian officials during the presidential campaign. Donald Trump’s son and former Trump campaign chairperson Paul Manafort will go before Senate committees on Wednesday.

Here are some key events coming up this week:

• The UK holds post-Brexit trade talks with the US in Washington.

• China posts industrial profits for last month, with early indicators pointing upward.

• Japanese June data also due this week may show sluggish CPI, even amid a tightening labour market and increased household spending.

• Fed policy makers begin their meeting on Tuesday, with a decision due on Wednesday.

• The US economy probably gained traction in the second quarter as spending by American consumers picked up after a lull early this year.

• The gross domestic product report follows the two-day Fed policy meeting.

• Results from Facebook, Deutsche Bank, Nomura, BNP Paribas SA and UBS are among those expected this week.

Here are the main moves in markets:

Currencies

• The Bloomberg Dollar Spot Index was flat as of 09:33. The gauge erased an earlier loss of 0.1%.

• The euro rose less than 0.1% to $1.1649 after dropping 0.2% on Monday. The currency is trading near the highest level since January 2015.

• The British pound was little changed, while the rand dropped 0.1%.

• The yen was little changed at ¥111.10/$. The currency had strengthened for five straight days.

• The Australia dollar rose 0.1%, after erasing an earlier decline.

• Attention turns to two key events on Wednesday: June quarterly inflation data and a speech on the labour market and monetary policy from Reserve Bank of Australia Governor Philip Lowe.

Stocks

• The Stoxx Europe 600 Index climbed 0.4% after sliding 1.6% over the previous three session.

• Japan’s Topix index lost 0.3%.

• Australia’s S&P/ASX 200 Index added 0.7%.

• South Korea’s Kospi index retreated 0.5%. 

• The Hang Seng Index was little changed while the Shanghai Composite Index slipped 0.2%.

• Futures on the S&P 500 Index were little changed after the underlying gauge slipped 0.1%.

• Nasdaq 100 Index futures declined after Alphabet slumped in after-hours trading as sales at Google’s parent fell short of the most-optimistic estimates.

Commodities

• WTI crude gained 0.6% to $46.60. It rose 1.3% on Monday after Saudi Arabia said it would cap shipments at 6.6 million barrels a day in August, 1 million lower than a year earlier.

• Gold was little changed at $1 255.16, after rising for three straight days.

Bonds

• The yield on US 10-year Treasuries was steady at 2.25%.

• Australian benchmark yields rose one basis point to 2.69%.

• Yields in France fell one basis point, while those in the UK and Germany were little changed.

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Rand - Dollar
18.95
-0.3%
Rand - Pound
23.96
-0.3%
Rand - Euro
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