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Banks, Financial

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Categorized | Currencies

Asian markets cautious as dollar continues retreat

Posted on November 29, 2016

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

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

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

Japanese stocks are 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 was up 0.2 per cent, while Hong Kong’s Hang Seng was down 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.

The yen is 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 today 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 this morning fixed the currency’s trading range with the US dollar stronger.

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 just as much at $46.92. Prices jumped about 2 per cent on Monday on hopes the Opec meeting will yield a deal.