New | September rate rise by US ‘less compelling’, says New York Fed official

A Federal Reserve interest rate rise next month seems less appropriate given the recent global market turmoil has increased the risks to the United States economy, an influential Fed official said on Wednesday.

New York Fed president William Dudley said the prospects of a September rise "seems less compelling to me than it was a few weeks ago". Addressing the market sell-off, which was set off by fears that China’s economy is slowing, Dudley said he wanted to see more US economic data before making a final judgment on the timing of policy tightening.

US dollar up for second day as stocks recover

The US dollar rallied for a second session on Wednesday as some calm returned to financial markets with Wall Street stocks firmer and European shares recouping some losses, all of which reduced the need to buy safe-haven currencies like the yen.

China’s central bank increased efforts to shore up sentiment, pumping US$21.8 billion into the money market, a day after it cut interest rates and relaxed reserve requirements for some large banks.

In mid-morning trading, the euro was down 0.7 per cent at US$1.1427, with the single currency also hurt by comments from a senior European Central Bank official. Peter Praet said the risk of the ECB missing its inflation target has increased due to commodity price falls and weakness in some overseas economies.

The dollar was up 0.2 per cent at 119.13 yen, having slumped to a seven-month low of 116.16 on Monday.