Dollar falls, gold at record high as bets on big Fed cut rise By Reuters

By Kevin Buckland

TOKYO (Reuters) – The dollar fell against the yen on Friday while gold hit an all-time high as investors increased bets on a very large interest rate cut by the Federal Reserve next week after media reports suggested the decision was a tough one for officials. .

Asian shares also advanced after traders raised bets back to 41% for a 50 basis point cut in the US rate on Sept. 18, according to LSEG data at 0155 GMT, from about 28% before the items from the Financial Times and the Wall Street Journal each. called the decision “a close call.”

“This is another twist in the (Fed rate cut) debate,” said Tony Sycamore, an analyst at IG, noting the tug of war in bond futures and the dollar-yen rate in particular.

“Everyone thought we were back on track for 25 basis points, and now 50 is suddenly back on the table.”

The dollar fell 0.41 percent to 141.225 yen, heading back to Wednesday’s low of 140.71, its weakest level this year.

The yen was also supported this week by dodgy comments from Bank of Japan officials, with policy council member Naoki Tamura saying on Thursday that he was “concerned that the risk of inflation is rising.”

which measures the currency against the yen and five other major rivals, fell to a one-week low of 101.03.

The euro rose 0.09% to $1.1084, building on Thursday’s 0.57% advance, after European Central Bank President Christine Lagarde dismissed the prospect of an October interest rate cut after a quarter-point cut expected on Thursday.

Gold extended Thursday’s 1.9 percent rise to hit a new record high of $2,567.93, supported by a weaker dollar.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.53 percent.

Hong Kong led gains in regional markets, gaining 1.13%. Mainland China blue chips added 0.24%. Australia’s benchmark index rose 0.31%. South Korea’s Kospi was flat.

However, Japanese stocks underperformed, dragged down by a stronger yen, with a loss of 0.48%.

Japan, mainland China and South Korea all head into long weekends, with Tokyo returning on Tuesday, China on Wednesday and South Korea only on Thursday.

U.S. stock futures were flat following Thursday’s cash index gains.

continued to rise after rising about 2% overnight as producers assessed the impact on output after Hurricane Francine tore through the Gulf of Mexico.

U.S. West Texas Intermediate crude futures rose 0.54 percent to $69.34 a barrel, building on Thursday’s 2.5 percent gain. Futures were up 0.47% at $72.31, after rising 1.9% in the previous session.