Markets & Finance News

* Dollar strengthens on Dudley comments (Adds U.S. market close)

The dollar gained on Monday as an influential U.S. Federal Reserve official expressed confidence that rising wages would help revive domestic inflation, which has shown signs of softening recently. The yen fell to two-week lows against the greenback and the euro after officials of the Bank of Japan at a meeting on Friday downplayed the likelihood that the bank would begin to roll back emergency stimulus to support the economy. Remarks by New York Fed President William Dudley on Monday that tightening in the labor market should help drive up inflation helped offset concerns by some investors that stubbornly low inflation would not allow policy-makers to raise rates further the rest of this year. "The Fed doesn't seem to be too concerned about the recent pullback in the inflation data. They are committed to policy normalization," said Eric Viloria, currency strategist at Wells Fargo Securities in New York. Last week, the Fed, as expected, raised key overnight borrowing costs by a quarter point and left the door open for another rate increase later this year. It also provided details on its plan to reduce its bond purchases in a bid to shrink its $4.5 trillion balance sheet. "Inflation is a little lower than what we would like, but we think that if the labor market continues to tighten, wages will gradually pick up, and with that inflation will gradually get back to 2 percent," Dudley told a local business group in Plattsburg, New York. Traders raised their outlook on a rate hike by the Fed's Dec. 12-13 policy meeting to 47 percent from 41 percent late on Friday, CME Group's FedWatch tool showed. The dollar index, which gauges the dollar against six other currencies, was up 0.4 percent at 97.537. The euro was down 0.4 percent versus the greenback, to $1.1147, while against the yen the dollar increased 0.5 percent, at 111.43 yen. The euro was up 0.1 percent against the yen, at 124.25 yen . Positioning data showed net bullish bets on the euro reached their highest level in more than six years last week. There was no discernible boost for the single currency from the landslide victory of French President Emmanuel Macron's government in parliamentary elections on Sunday. Sterling declined 0.4 percent to $1.2732 as Britain began formal negotiations on its planned exit from the European Union. The UK ruling Conservative Party's loss of its parliament majority earlier this month raised speculation of a drift toward a "soft Brexit," which had supported the pound. Many analysts, however, expect developments from the talks would hurt sterling. ======================================================== Currency bid prices at 2:29PM (1829 GMT) Description RIC Last U.S. Close Pct Change YTD Pct Previous Change Session Euro/Dollar EUR= $1.1148 $1.1197 -0.44% +6.04% Dollar/Yen JPY= 111.4800 110.8400 +0.58% -4.61% Euro/Yen EURJPY= 124.29 124.12 +0.14% +0.93% Dollar/Swiss CHF= 0.9753 0.9736 +0.17% +0.00% Sterling/Dollar GBP= 1.2736 1.2774 -0.30% +3.24% Dollar/Canadian CAD= 1.3220 1.3210 +0.08% +0.00% Australian/Doll AUD= 0.7594 0.7616 -0.29% +5.25% ar Euro/Swiss EURCHF= 1.0873 1.0898 -0.23% +1.46% Euro/Sterling EURGBP= 0.8753 0.8755 -0.02% +2.76% NZ NZD= 0.7228 0.7248 -0.28% +0.00% Dollar/Dollar Dollar/Norway NOK= 8.4910 8.4451 +0.54% +0.00% Euro/Norway EURNOK= 9.4639 9.4588 +0.05% +4.16% Dollar/Sweden SEK= 8.7473 8.7067 +0.05% +0.00% Euro/Sweden EURSEK= 9.7520 9.7471 +0.05% +1.80% (Additional reporting by Patrick Graham in London, Masayuki Kitano in Singapore and Shinichi Saoshiro in Tokyo; Editing by Marguerita Choy and Leslie Adler)

* Dollar strengthens on Dudley comments (Adds European market close)

* Dollar strengthens on Dudley comments (Updates with U.S. market open, changes byline, dateline; previous LONDON)

The dollar nudged higher on Monday as an influential U.S. Federal Reserve official expressed confidence rising wages would help revive domestic inflation which has shown signs of softening recently. The yen weakened against the greenback and euro following Friday's Bank of Japan meeting where officials downplayed the likelihood it would begin to roll back emergency stimulus for the economy. On Monday, New York Fed President William Dudley's comments came with doubts whether stubbornly low inflation, which has been stuck below the central bank's 2-percent goal, would allow policy-makers to raise rates further the rest of the year. "The Fed doesn't seem to be too concerned about the recent pullback in the inflation data. They are committed to policy normalization," said Eric Viloria, currency strategist at Wells Fargo Securities in New York. The Fed, as expected, raised key overnight borrowing costs by a quarter point last Wednesday and left the door open for another rate increase later this year. It also provided more details on its plan to reduce its bond purchases in a bid to shrink its $4.5 trillion balance sheet. "Inflation is a little lower than what we would like, but we think that if the labor market continues to tighten, wages will gradually pick up and with that, inflation will gradually get back to 2 percent," Dudley told a local business group in Plattsburg, New York. Traders raised their outlook on a rate hike by the Fed's Dec. 12-13 policy meeting to 45 percent from 41 percent late on Friday, CME Group's FedWatch tool showed. An index, which gauges the dollar against six other currencies, was up 0.15 percent at 97.310. The euro was down 0.2 percent versus the greenback to $1.1174, while the dollar gained 0.4 percent against the yen at 111.32 yen. The single currency was up 0.2 percent at 124.39 yen, Positioning data showed speculators' net bullish bets on the euro reached their highest in seven years last week. There was no discernible boost for the single currency from French President Emmanuel Macron's landslide in parliamentary elections on Sunday. Sterling was 0.1 percent lower at $1.2761 higher ahead of the formal start of negotiations on Britain's planned exit from the European Union. Speculation that a surprise election result earlier in June could generate a drift towards a "soft Brexit" has given the pound some support, although many analysts expect newsflow from the talks to hurt it. ======================================================== Currency bid prices at 10:40AM (1440 GMT) Description RIC Last U.S. Close Pct Change YTD Pct Previous Change Session Euro/Dollar EUR= $1.1172 $1.1197 -0.22% +6.27% Dollar/Yen JPY= 111.3200 110.8400 +0.43% -4.75% Euro/Yen EURJPY= 124.38 124.12 +0.21% +1.01% Dollar/Swiss CHF= 0.9734 0.9736 -0.02% -4.36% Sterling/Dollar GBP= 1.2759 1.2774 -0.12% +3.43% Dollar/Canadian CAD= 1.3207 1.3210 -0.02% -1.66% Australian/Doll AUD= 0.7605 0.7616 -0.14% +5.41% ar Euro/Swiss EURCHF= 1.0877 1.0898 -0.19% +1.49% Euro/Sterling EURGBP= 0.8754 0.8755 -0.01% +0.00% NZ NZD= 0.7243 0.7248 -0.07% +4.35% Dollar/Dollar Dollar/Norway NOK= 8.4494 8.4451 +0.05% -2.17% Euro/Norway EURNOK= 9.4423 9.4588 -0.17% +3.92% Dollar/Sweden SEK= 8.7272 8.7067 +0.04% +0.00% Euro/Sweden EURSEK= 9.7506 9.7471 +0.04% +1.78% (Additional reporting by Patrick Graham in LONDON, Masayuki Kitano in SINGAPORE and Shinichi Saoshiro in TOKYO; Editing by Marguerita Choy and Ed Osmond)

European stocks headed for their biggest rise in two months on Monday as investors snapped up cut-price retail and tech stocks and France's markets cheered a parliamentary majority for pro-business President Emmanuel Macron.

* Risk Fed officials may show more doubt over inflation outlook

* Premature for BOJ to discuss normalisation - Lipton (Adds interview with deputy MD Lipton)

* European stocks open 0.8 percent higher, France outperforms

Emerging stocks enjoyed their biggest daily gains in nearly four weeks on Monday though weaker oil prices took a toll on many markets, with Russia's rouble down half a percent.