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Categorized | Currencies

Asia markets cautious as Wall St and dollar weaken


Posted on November 29, 2016

Tuesday 2.30am GMT

Overview

Markets across Asia were trading cautiously as Wall Street and the US dollar weakened overnight and the price of oil has pulled back.

Hot topic

Eyeing a possible third consecutive day of declines, the US dollar index was 0.1 per cent lower at 101.21 in Asian trade and was facing its longest losing streak since the start of this month.

The US dollar index was suffering only a mild retreat in Asian trade but its decline over the past three sessions has prompted a global rally in stocks and a sell-off in bonds since Donald Trump was elected US president to stall.

Equities

Japanese stocks were lower after the decline in the dollar caused the yen to strengthen overnight. The Topix benchmark was fractionally lower, possibly bringing an end to a 12-day winning streak that is its equal third-longest of the past 30 years. The Nikkei 225 was down 0.2 per cent.

Australia’s S&P/ASX 200 rose 0.2 per cent, while Hong Kong’s Hang Seng lost 0.1 per cent. China’s Shanghai Composite was down 0.1 per cent and the technology-focused Shenzhen Composite was 0.2 per cent lower.

Forex

The yen was 0.1 per cent weaker at ‎¥‎112 per dollar but its 1.1 per cent jump overnight has proved enough to keep equities under pressure. The currency strengthened briefly following the release of retail sales and household spending data that showed a less severe contraction in October.

The best-performing Asian currency on Tuesday was China’s renminbi, up by one-third of 1 per cent at Rmb6.892 per dollar as the greenback weakened and the country’s central bank fixed the currency’s trading range with the US dollar stronger.

Commodities

Oil prices were slightly weaker ahead of Wednesday’s much-anticipated meeting between Opec members that markets hope will result in supply cuts.

Brent crude, the international benchmark, was down 0.4 per cent at $48.07 a barrel, while West Texas Intermediate was down by as much at $46.92. Prices jumped 2 per cent on Monday on hopes that the Opec meeting would yield a deal.

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