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GLOBAL MARKETS-Dollar advance fades but oil still under pressure

Published 05/04/2016, 03:49 am
Updated 05/04/2016, 03:50 am
© Reuters.  GLOBAL MARKETS-Dollar advance fades but oil still under pressure
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* Oil touches 1-month low

* Dovish Rosengren expects earlier Fed hike than does market

* Metals prices fall on China demand concern

* Defensive plays lead European shares higher

* Wall St little changed (Adds close of European markets)

By Chuck Mikolajczak

NEW YORK, April 4 (Reuters) - The dollar resumed its move lower on Monday after the impact of comments from a U.S. Federal Reserve official faded, but oil prices stayed under pressure on skepticism producers would be able to freeze output.

A usually dovish U.S. central banker, Boston Fed President Eric Rosengren, said it was "surprising" that futures markets currently imply one or zero interest-rate hikes this year, a prediction he said could prove "too pessimistic." moved the dollar .DXY up to a session high of 94.829 against a basket of major currencies before fading. The greenback was last down 0.14 percent at 94.482. have been trying to reconcile conflicting statements from U.S. Federal Reserve officials in recent weeks since the central bank issued its policy statement on March 16.

Federal Reserve Chair Janet Yellen 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.

"It goes to show how the Fed rate debate remains fluid, but I think the market has attuned mostly with the Fed Chair," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington, on the limited impact of Rosengren's comments.

Federal Reserve Bank of Minneapolis President Neel Kashkari and Bank of Dallas President Robert Kaplan are scheduled to speak later on Monday.

New orders for U.S. factory goods fell in February and business spending on capital goods was much weaker than initially thought, the latest indications that economic growth remained sluggish in the first quarter. Dow Jones industrial average .DJI fell 26.13 points, or 0.15 percent, to 17,766.62, the S&P 500 .SPX lost 3.38 points, or 0.16 percent, to 2,069.4 and the Nasdaq Composite .IXIC dropped 6.47 points, or 0.13 percent, to 4,908.08.

MSCI's index of world shares .MIWD00000PUS , edged up 0.16 percent, buoyed by gains in European stocks. The pan-European FTSEurofirst 300 share index .FTEU3 closed up 0.46 percent, led higher by gains in defensive sectors such as utilities and healthcare. crude LCOc1 , was down 1.5 percent at $38.11, its lowest since March 4. U.S. crude CLc1 was off 1.6 percent at $36.21 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. 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 CMCU3 hit a one-month low of $4,757.50 a tonne on concern about Chinese demand for metals and was last down 1.4 percent at $4,760.50. XAU= fell for a second successive day, dropping about 0.38 percent to $1,217.41 an ounce. U.S. 10-year notes US10YT=RR were last up 7/32 in price to yield 1.7688 percent, after hitting a one-month low of 1.753 percent.

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