Fed Bets Propel U.S. Dollar as Asian Equities Drop

Asian stocks retreated as speculation U.S. interest rates will be raised as soon as next month underpinned the dollar. Bonds in the region declined, while commodities were mixed, with copper falling as crude oil rallied.

Consumer stocks led the MSCI Asia Pacific Index down 0.5 percent by 10:03 a.m., with Japan’s Topix index dropping at least 0.1 percent with Australian shares. U.S. index futures rose 0.1 percent after Apple Inc. drove equity losses Tuesday. The Bloomberg Dollar Spot Index extended gains at a four-month high, as yields on 10-year debt from New Zealand to Japan climbed. Oil rose a second day, continuing its recovery from Monday’s rout, while copper resumed losses with gold.

Traders boosted bets on a September rate hike in the U.S. after Federal Reserve Bank of Atlanta chief Dennis Lockhart said he would only endorse putting it off should there be a significant deterioration in economic data. Oil’s rebound steadied commodity markets, quelling losses among energy and mining stocks ahead of a swag of services industry data from China to Japan and the U.S. Thailand is projected to keep benchmark borrowing costs unchanged at a review Wednesday.