U.S. dollar rises against major Asian currencies

In the meantime, global financial conditions remain highly accommodative, the Fed's latest move made sense, and we believe the USA economy will handle this policy transition quite well. New York Fed President William Dudley said on Monday that labour market tightness should help drive up inflation, reinforcing the message that recent weak data is unlikely to derail plans to keep raising interest rates.

"This is actually a pretty good place to be" with unemployment at 4.3 percent and inflation at about 1.5 percent, Dudley told the North Country Chamber of Commerce in Plattsburg, New York.

And though Kaplan said he retains an "open mind" about how many more rate hikes the Fed should deliver this year, he also highlighted an additional worry: the likelihood in his mind that even when fully healthy the USA economy will need interest rates to stay below 3 percent. The South Korean won dropped 0.4 per cent, and the Australian dollar lost less than 0.1 per cent. "We are still one of the highest-yielding bond markets on the planet", said Gennadiy Goldberg, an interest rate strategist at TD Securities in NY.

He was speaking at a business round-table meeting in Plattsburg, NY today, making hawkish comments that suggested the Fed remained on track to raise interest rates further this year despite recent disappointing U.S. inflation data.

The dollar reached a more than three-week high versus the yen on Tuesday, after an influential Federal Reserve official said US inflation should rise alongside wages, reinforcing expectations for the Fed to keep raising interest rates.

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The greenback had a further lift on Tuesday following dovish comments from Bank of England Governor Mark Carney, but later gave back gains to trade little changed versus a basket of major currencies. The US dollar is gaining ground across the board.

The tech sector .SPLRCT , up 1.7 percent, pushed equity indexes on Wall Street higher, with the Dow and S&P 500 closing at records.

The 10-year note added 1.3 basis point to 2.173%, while the 30-year bond was up 0.8 basis point to 2.748%.

Retailers in Europe .SXRP , closed up 0.8 percent, and in the U.S.SPXRT , gained 0.9 percent, recouping some losses that were triggered on Friday by news of Amazon's $13.7 billion deal to buy upscale grocer Whole Foods Market. For 2018, the Federal Reserve Bank is anticipating at least 3 rate hikes.

Spot gold rose 0.1 % to $1,243.90 per ounce, as of 0044 GMT, after it hit a fresh near five-week low of $1,242.61 during the session. It's also important to recognize that this Fed is normalizing rates from excessively low levels with a keen eye on adjusting the path if USA inflation disappoints further. Oil prices fell about 3 percent to a 10-month low in heavy trading on Wednesday, as nagging fears about a global glut fed a selloff that was interrupted briefly by news of a larger-than-expected drop in USA inventories.

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