Fischer was interviewed in Jackson Hole, Wyoming, where central bank officials from around the world are attending an annual conference sponsored by the Federal Reserve Bank of Kansas City. Job gains have averaged 211,000 so far this year, and economists expect a 220,000 gain when August data are reported on September 4.

As the second-ranking official at the Federal Reserve Board of Governors, Fischer’s words are watched closely by investors.

Fed officials are weighing when to begin raising interest rates, which have remained at historic lows since 2006. This would be the first interest rate hike in nine years and would dent the outlook of gold as it is not an interest-bearing asset. He said with that small increase, rates will still be historically low, continuing to provide support to consumer and business borrowers.

“With inflation low, we can probably remove accommodation at a gradual pace”, Mr Fischer explained. Hong Kong’s Hang Seng also spent most of the day in negative territory before closing up 0.3 percent at 21,670.58.

Inflation by both measures has stayed below 2 per cent for more than three years. Fischer is scheduled to deliver a speech on inflation to conference participants on Saturday.

The Fed is monitoring the fallout for the United States from stock market turmoil spurred by concerns about a slowdown in China. But they haven’t ruled out an increase in September. But Dudley added that the notion of a rate hike “could become more compelling by the time of the meeting as we get additional information” about the economy.

“That is why we follow economic developments in the rest of the world as well as the U.S. in reaching our interest rate decisions”.

Traders who bet on the future path of fed-funds rate have put a 28% chance of a rate hike in September, which gauges the probability of a rate hike in a given month. What happens on the markets this week will be key in determining how soon that signal comes.

Currently, annual inflation is just 0.3 percent in the index watched by the Fed for their 2 percent long-term target. How these countries fare can affect U.S.’ trade with them and ultimately the American economy.

But doves worry that the economy remains vulnerable to shocks, such as a major slowdown in China. He pointed out towards the fact that some effects from a stronger dollar and the plunge in oil prices have already started to diminish.

Debates emerged within the Fed about liftoff timing. This week, two prominent Harvard economists – Martin Feldstein and Lawrence Summers – wrote dueling opinion pieces. Moving as planned, however, brings currency risk.

As part of the talk, Fischer dropped a few hints about interest rates, which have hovered near historic lows since the global financial crisis. Though initially the Feds were uncertain about hiking the rates from September, it appears to be in the offing now.

However, Fischer made it clear that global economic factors play a role in their decision making. However, once that uncertainty passes, the dollar will bounce back, she said.