Azernews.Az

By Bloomberg

Emerging-market currencies fell, with China’s yuan at its weakest since October 2012, and Standard & Poor’s 500 Index futures dropped on speculation rising U.S. inflation will spur interest rate increases. Oil in New York held below $50 a barrel.

The greenback was 0.2 percent stronger against the yuan by 2:07 p.m. in Tokyo and added at least 0.2 percent versus the currencies of Indonesia, Malaysia and Thailand. The Bloomberg Dollar Spot Index is set for an eighth monthly advance. Contracts on the S&P 500 dropped 0.1 percent, while the MSCI Asia Pacific Index held a 4.3 percent February gain. U.S. oil traded at $49.10 while Brent was at $61.04 in London, the widest gap in more than a year.

A bigger-than-forecast increase in U.S. core inflation sent the dollar soaring Thursday after Federal Reserve Chair Janet Yellen signaled this week that while inflation is still too low for an imminent rate increase, the bank’s patience has limits. U.S. fourth-quarter economic growth may be revised down today. Declining North American rig counts have failed to dent record crude surpluses, obliterating gains for the U.S. oil benchmark as signs of recovery in overseas markets send Brent to its biggest monthly advance in almost six years.

“Everyone had pre-positioned for a pretty weak CPI,” said Matt Derr, a foreign-exchange strategist in New York at Credit Suisse Group AG. “Even if it wasn’t a huge surprise, it was enough to get that unwound. Things moved pretty aggressively after Yellen’s testimony.”

Dollar Strength

The yuan slid to 6.2697 per dollar after People’s Bank of China weakened its fixing by most since Jan. 23. The currency traded about 1.99 percent away from the reference rate, near the edge of the 2 percent band imposed by the central bank. The offshore yuan slid 0.4 percent to 6.2877.

The dollar added 0.2 percent to 12,869 Indonesian rupiah, 0.8 percent to 3.6125 Malaysian ringgit and bought 32.363 Thai baht. Thailand’s currency is Asia’s best-performing this month, gaining 1.2 percent against the greenback.

The Bloomberg dollar gauge, which tracks the greenback versus 10 major peers, retreated 0.2 percent today after surging 0.9 percent on Thursday. The euro was little changed at $1.1213 Friday, near its weakest level since 2003. The yen added 0.2 percent to 119.15 per dollar following a 0.5 percent drop. Japan’s currency has decreased 1.5 percent in February, the worst performance behind Indonesia’s rupiah among 11 Asian currencies tracked by Bloomberg.

Japan Stocks

Japan’s Topix index is headed for a 7.5 percent February advance, its biggest monthly increase since September 2013. Japanese consumer prices excluding fresh food rose 2.2 percent from a year earlier in January, trailing the 2.3 percent increase estimated by economists and slowing from 2.5 percent in December.

Hong Kong’s Hang Seng Index climbed 0.4 percent and a gauge of Chinese shares in the city added 9.4 percent. The Shanghai Composite Index increased 0.7 percent to the highest since Jan. 27.

Australia’s S&P/ASX 200 Index climbed 0.3 percent, while the Kospi index in Seoul fell 0.1 percent. The MSCI All-Country World Index -- which touched a record Thursday amid increased monetary stimulus from Japan to Europe -- was also little changed.

Fed Bank of St. Louis President James Bullard said Thursday that the Fed Open Market Committee should remove its pledge to be “patient” in raising rates in March to give it flexibility to tighten policy as soon as June. The central bank has kept key rates near zero since 2008.

‘Can’t Wait’

Feb Bank of San Francisco President John Williams, who votes on policy this year, expects inflation to return to the central bank’s target level of 2 percent by the end of 2015, and advocated for raising borrowing costs before then.

“We can’t wait until inflation is back to 2 percent and we’re at full employment before we start removing accommodation,” Williams said in a Fox Business Network interview.

The U.S. consumer-price index declined 0.7 percent in January after dropping 0.3 percent in the previous month, the data Thursday showed. The median of economists’ forecasts compiled by Bloomberg called for a 0.6 percent decrease. Core inflation rose 0.2 percent from December, exceeding the 0.1 percent projected increase.

West Texas Intermediate crude climbed 1.3 percent after tumbling 5.5 percent on Thursday. WTI’s discount to Brent crude widened to the most in 13 months after a report Wednesday showed U.S. crude supplies rose to 434.1 million barrels last week, the highest level in weekly estimates from the Energy Information Administration beginning in 1982.

Gold, Copper

Both contracts sank about 50 percent in 2014 amid signs of a global glut in the commodity and as Saudi Arabia led a decision in November by the Organization of Petroleum Exporting Countries to maintain the group’s output.

Gold for immediate delivery slipped 0.1 percent to $1,208.71 an ounce, taking its February retreat to 5.9 percent. Silver retreated 0.1 percent.

Copper for three-month delivery on the London Metal Exchange retreated 0.3 percent to $5,873 a tonne today, trimming its gain in February to 6.9 percent. That’s the biggest monthly increase since September 2012.