The dollar edged lower on Monday on contradictory views of prospects for an increase in US interest rates, while oil prices stayed under pressure on skepticism producers would be able to freeze output to stem a global glut.
A usually dovish US central banker, Boston Federal Reserve President Eric Rosengren, said it was “surprising” that futures markets currently imply only one or no interest-rate hikes this year, a prediction he said could prove “too pessimistic''.
That temporarily moved the dollar up to a session high of 94.829 against a basket of major currencies. The greenback was last down 0.09 per cent at 94.535, its fifth decline in six sessions.
Investors have been trying to reconcile conflicting statements from US Federal Reserve officials in recent weeks since the central bank issued its policy statement on March 16.
Federal Reserve Chair Janet Yellen had said last week the central bank would proceed cautiously in raising rates, in contrast to more hawkish comments from other Fed officials. The apparent lack of cohesion has left investors uncertain in an environment of mixed economic data.
“Obviously they have to come to a consensus and certainly Yellen drives that more than anyone else but then everyone on the Board and even those that aren't voters this year go out and say things that are that are completely contradictory,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.
“I'm not sure that the new Fed transparency is of any value if they all disagree with each other anyway.”
Federal Reserve Bank of Minneapolis President Neel Kashkari and Bank of Dallas President Robert Kaplan were scheduled to speak later on Monday.
New orders for US factory goods fell in February and business spending on capital goods was much weaker than initially thought, the latest sign first-quarter economic growth remained sluggish.
The Dow Jones industrial average fell 55.75 points, or 0.31 per cent, to 17,737, the S&P 500 lost 6.65 points, or 0.32 per cent, to 2,066.13 and the Nasdaq Composite dropped 22.75 points, or 0.46 per cent, to 4,891.80.
MSCI's index of world shares was flat. The pan-European FTSEurofirst 300 share index closed up 0.46 per cent, led higher by gains in defensive sectors such as utilities and healthcare.
Brent crude, settled down 2.5 per cent at $37.69, its lowest since March 4. US crude settled off 3 per cent at $35.70 as a global glut seemed likely to continue. Iran will raise its crude output and exports until it reaches pre-sanction levels, the semi-official Mehr news agency quoted Oil Minister Bijan Zanganeh as saying.
Prices have fallen from above $100 a barrel since mid-2014 on a supply glut, bottoming at $27.10 in late January. Brent topped $42.50 last month in anticipation of agreement among producers to freeze output.
Copper prices hit a one-month low of $4,757.50 a tonne on concern about Chinese demand for metals and was last down 1.5 per cent at $4,760.50.
Benchmark US 10-year Treasury notes were last up 7/32 in price to yield 1.7688 per cent, after hitting a one-month low of 1.753 per cent.