�. Dollar up broadly, back above 120.00 yen
�. Yellen says Fed still on track to hike rates this year
�. Dollar on track for best week since mid-July
The dollar rallied across the board on Friday after U.S. Federal Reserve Chair Janet Yellen left the door open to a hike in interest rates later this year, putting the greenback on track for its best week in over two months.
The dollar had hit a three-week low against a basket of major currencies .DXY after the Fed failed to raise rates at its September meeting and cut its U.S. growth forecasts a week earlier, with some investors pushing their expectations of a first hike in almost a decade into 2016.
But in a speech late on Thursday, Yellen said she expected the Fed to begin raising rates later in 2015, as long as inflation remained stable and the U.S. economy was strong enough to boost employment.
The dollar index rose half a percent to 96.502 on Friday, turning around from a slide to 95.458 the previous day, and taking its gains for the week to 1.7 percent - its best performance since mid-July. The euro fell 0.8 percent to $1.1138 EUR=, pulling away from levels closer to $1.1300 on Thursday.
"If conditions don't worsen between now and the September employment report next week, (there could be) possibly a little bit of incremental dollar appreciation...but I'm not convinced it will be too aggressive," said BMO Capital Markets currency strategist Stephen Gallo in London.
"The market views the international picture as the same, if not worse, than it was this time last week: equities have weakened further, Chinese data have been worse than expected, the Brazilian data hit a record low."
Markets had been in a downbeat mood before Yellen spoke, with Wall Street closing in the red and safe-haven U.S. Treasury yields falling. But since her remarks, the 10-year Treasury yieldUS10YT=RR nudged up, and U.S. stock futures ESc1 turned higher.
Against the safe-haven yen, the dollar firmed 0.4 percent to 120.61 JPY=, having been as low as 119.21 before Yellen's comments.
The dollar has traded in a narrow 118.60-121.38 yen band this month - in contrast to moves between 116 and 125 last month
�. and was expected to stay range-bound even after the latest statements from Yellen.
"Despite what Yellen said, there is still no guarantee that the Fed will hike rates this year. As such, the dollar is likely to lack clear direction and move within 118-122 yen for a while," said Masafumi Yamamoto, senior strategist at Monex in Tokyo.
The Australian and New Zealand dollars struggled to make any friends on Friday on broad U.S. dollar strength after Federal Reserve Chair Janet Yellen kept the door open to a hike in interest rates later this year.
The Australian dollar AUD=D4 eased to $0.7000, from a peak of $0.7043 on Thursday, on rising speculation the Fed may after all raise rates this year, a week after the central bank delayed a long-anticipated move.
The Aussie had already been under pressure due to worries about global growth after China issued more disappointing data. China is Australia's top export market.
Not helping sentiment for the local currency, ANZ Bank revised its Reserve Bank of Australia (RBA) forecasts. It is now calling for two cuts in 2016, around February and May, which would take the cash rate to a record low of 1.5 percent.
"The change comes on the back of our downgraded global growth forecasts, and the non-mining sector not being strong enough to offset ongoing weakness in the mining sector," said ANZ in a note.
The Aussie was on track to post weekly losses of 2.5 percent, pulling closer to a 6-1/2-year trough below 69 cents touched last month. It was also nursing heavy losses against the yen at 91 yen AUDJPY, to be down 2.4 percent for the week.
Charts were negative with daily average studies pointing south. Support was found at $0.6938.
Across the Tasman sea, the New Zealand dollar NZD=D4 eased to $0.6326 as a relief rally petered out. The kiwi had leapt 1.3 percent on Thursday after dairy giant Fonterra surprised bears by revising up guidance for its farmgate price payout.
Dairy is New Zealand's top export earner.
The kiwi was down 1.3 percent for the week, ending two consecutive weeks of gains. The kiwi dropped below 62 cents last month for the first time in six years.
New Zealand government bonds 0#NZTSY= dipped, sending yields four basis points higher along the curve.
Australian government bond futures also retreated, with the three-year bond contract YTTc1 off 5 ticks at 98.120. The 10-year contract YTCc1 was down 3.5 ticks to 97.2750.
�. Strong seasonal refinery demand from China supports market
�. But analysts say prices to remain low on slowing demand
�. Japan's core consumer prices fell 0.1 percent in August
�. HSBC warns that economic weakness not confined to China
Oil markets rose on Friday as strong seasonal demand from China outweighed weak consumer data from Japan, although analysts said that the slowing global economic outlook meant that oil prices would likely remain low for months to come.
While China's commercial crude oil stocks were virtually flat between July and August, refined fuel stocks sank 7.82 percent, implying strong demand due to two months of consecutive price cuts. Demand was also bolstered by the resumption of coastal fishing and the approaching harvest.
Globally traded Brent futures LCOc1 were at $48.54 per barrel at 0639 GMT, up 37 cents from their last close. U.S. West Texas Intermediate (WTI) futures CLc1 were at $45.32 a barrel, up 41 cents.
Oil prices rose by over a quarter in late August after a slowing rig count and a reduction in U.S. crude stocks implied a tightening North American market.
Yet a global oversupply that analysts estimate around 2.5 million barrels per day, remains largely in place due to high production elsewhere, for instance in Russia and the Middle East, while demand is slowing, and oil prices have fallen back 10 percent since the beginning of September as the demand outlook has weakened along with economic growth.
Japan's core consumer prices marked the first annual drop since the central bank deployed its massive stimulus programme over two years ago, casting further doubt on whether heavy money printing alone can accelerate inflation to its 2 percent target.
HSBC said that markets had focused too much on China's slowdown, warning that many developed economies were faltering.
"It turns out that developed market imports haven't been anywhere near as robust as relatively upbeat local demand data would suggest ... For all their recent swagger, developed markets are hardly firing on all cylinders. So, don't just blame China," the bank said on Friday.
ANZ bank said that "risks of further downgrades to emerging market economic growth will weigh on investor sentiment and keep any interest in commodities sidelined," adding that it expected WTI to fall by 10 percent within the next three months and Brent to drop 3 percent.
South Africa's rand was flat against the dollar on Friday after hitting a record low the previous session as nagging concerns over weak domestic growth and the impact of a slowing Chinese economy strangled appetite for emerging market assets.
Stocks opened higher on South Africa's blue-chip Top-40 index .JTOPI, which was up 0.1 percent by 0705 GMT.
Government bonds were weaker with yields higher. The benchmark 2026 ZAR186= issue added 3.5 points to 8.475 percent in early trade.
At 0700 GMT the rand was 0.06 percent firmer at 13.8500 per dollar ZAR=D3, recovering slightly after dropping 1 percent to a record low of 14.0860 in the preceding session as the greenback extended its recent bull run.
The dollar received a boost after Federal Reserve chairwoman Janet Yellen said in a speech late on Thursday she expected the bank to begin raising rates later in 2015.
The rand has been the ropes since Wednesday after South Africa's Reserve Bank kept interest rates unchanged, citing weak economic growth, upside risks to inflation and uncertainty over the impact on the currency of a rate hike in the U.S.
"A delayed reaction to Wednesday morning's weak Chinese PMI figure seems to have combined with further falls in commodity prices, a stronger dollar and general uncertainty," said John Cairns, a currency strategist with Rand Merchant Bank.
Data on Wednesday showed Chinese factory activity fell to a 6-1/2-year low, spurring a sharp sell-off of commodity currencies.
On Friday, South Africa's treasury publishes government budget figures for August, while investors will also watch for growth and PMI data from the United States
�. Soy up on bargain buying after prices dropped 6-1/2 yr low
�. Wheat ticks up after falling 2 pct on Thursday, corn up
�. China importers in deals to buy 13.18 mln T U.S. soybeans
U.S. soybeans rose for a third session on Friday as bargain buying underpinned the market after prices hit their lowest since 2009 earlier this week.
A deal with Chinese buyers also supported prices. Importers from top buyer China agreed to buy a total of 13.18 million tonnes of U.S. soybeans valued at about $5.3 billion at a signing ceremony in Des Moines, Iowa, on Thursday, in one of the largest single-day soybean deals on record.
Chicago Board of Trade November soybeans SX5 are up around half a percent this week, the second weekly gain in seven.
Among other grains, wheat edged up after a 2 percent drop on Thursday as concerns over adverse weather in Australia and the Black Sea region eased amid a forecast of ample world supplies.
Wheat prices had initially rallied to a one-month high in the previous session, but later came under pressure after the International Grains Council (IGC) predicted global grain stocks to climb to a 29-year peak by the end of the 2015/16 season, including record inventories of wheat.
The IGC raised its forecast for global grain stocks at the end of the season by 9 million tonnes to 456 million, partly driven by an improved outlook for wheat output.
Wheat had rallied earlier in the week on concerns over potential unfavourable weather in the Black Sea and Australia.
However, Australian wheat production has avoided widespread production losses from the weather and it is too early to be concerned about dryness in the Black Sea region.
"Wheat has given up gains as news from Russia turned more bearish and global prospects were lifted," ANZ said in a note.
"The International Grain Council's monthly report lifted its forecast for global wheat stocks at the end of 2015-16 by 7 million tonnes."
Wheat WZ5 is up 2 percent this week, its third week of gain. Corn CZ5 has added more than 1 percent, recovering nearly half the losses from the previous week.
Commodity funds bought an estimated net 5,000 CBOT soybean contracts on Thursday, trade sources said. The funds also bought a net 5,000 soyoil contracts, sold 4,000 in wheat and sold 1,500 in corn.
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