Yellen makes case for gradual tightening

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The small business sentiment rose to 49.4 in September from 49.0 in August.

Federal Reserve Chairwoman Janet Yellen defended the central bank's projection for a gradual path of rate increases over the next few years, but said the Fed could consider a slower pace if low inflation proves persistent.

Inflation expectations may have "slipped a bit" over the past 2-3 years. "What the speech seemed to do is give you a lot of different scenarios, all of which will be the job for the new Fed chair to handle". Similarly, the Committee substantially discounted the reductions in inflation that occurred from 2014 through 2016 as a result of the decline in oil prices and the effects of the dollar's appreciation on import prices. But South Korea's Kospi added 0.1 percent to 2,375.92. WTI crude declined, though was still close to a five-month high after Turkey threatened to shut down Kurdish crude shipments.

Geopolitical tensions on the Korean peninsula and domestic political uncertainty also continued to weigh on the kiwi. The rising potential for the Federal Reserve to raise interest rates at the end of the year has pressed the noble metal down. "That could be more fundamental to the progress for Europe". He has been a critic of the European Central Bank's loose monetary policy.

Weekly data on US petroleum supplies will be released by Energy Information Administration late Tuesday and arly Wednesday.

-Brexit negotiations are getting underway again. "The impact of a successfully implemented (tax overhaul) plan would be far-reaching with President Trump placing a key focus on bringing back funds from US firms "parked overseas".

'Grave error': France's Macron berates Trump for threatening Iran nuclear deal
He pitched the idea to French President Emmanuel Macron , saying that he thought the Bastille Day parade was an impressive display of France's military.

However, with the RBNZ tipped to keep rates on hold at a record low 1.75 per cent there may be little reaction in the dollar.

The U.S. Dollar rose on Yellen's statements and U.S. interest rate futures prices dipped further to price in about 70 percent chance of a rate hike by December compared to near 60 percent on Monday. The tech-heavy Nasdaq Composite advanced 9.57 points, or 0.1%, to 6,380.16, recouping a fraction of losses from the previous session.

The US dollar index posted a rise by 0.40 percent to 93.04 at 18.20 GMT. The euro was at $1.1756-1757, down from $1.1812-1813, and at ¥132.48-49, up from ¥132.01-02. The British pound lost ground, as cable slid to below the $1.34 mark after trading above $1.35 in recent days. The benchmark Kospi dropped 1.75 points or 0.07 percent to 2,372.57.

In other commodities, the Brent crude oil spot price gained 0.14% to $58.61 per barrel as of 04:35 BST.

-Japan's Topix index closed flat after trading in a narrow range.

In a day of scant Asian economic news the Nikkei 225 was among the day's fallers, slipping 0.3%. Dollar/loonie was up by 0.29% on the day at 1.2380. Read how one of the world's most extreme stock rallies gets a reality check.