Dollar hovers near highs, Asian shares steady

MSCI Asia ex-Japan steady, Nikkei opens up; dollar index hovers near 7-month highs after solid retail data

 

The MSCI’s broadest index of Asia-Pacific shares outside Japan inched down 0.1%, weighed by a 0.3% drop in resources-reliant Australian shares which were hit by weaker commodity prices. Photo: AFP

Tokyo: The dollar hovered near a seven-month high against a basket of currencies on Thursday as strong US retail sales data sustained an optimistic growth outlook, while Asian shares steadied after another record Wall Street close.

The MSCI’s broadest index of Asia-Pacific shares outside Japan inched down 0.1%, weighed by a 0.3% drop in resources-reliant Australian shares which were hit by weaker commodity prices.

South Korean shares opened flat ahead of the Bank of Korea policy decision later in the session.

The US government reported retail sales grew 1.1% in February in the fastest rise since September, lifting the dollar index to its highest since 3 August of 83.055 on Wednesday.

The blue chip Dow Jones industrial average marked the index’s longest consecutive winning streak since November 1996 with a record closing high on Wednesday, a ninth straight session of all-time highs.

“The US economy appears to be getting back on track and burning rubber. The rise in the equity market is just one consequence of increase optimism for the US state of affairs,” Neal Gilbert, market strategist at GFT, said in a note to clients.

Japan’s Nikkei stock average opened up 0.8%.

The dollar was trading at ¥96.05, nearing Tuesday’s high of ¥96.71, its peak since August 2009.

The euro was at ¥124.45, retreating from a one-month high of 126.03 reached on Tuesday.

European shares recouped their earlier losses to end flat near 4-1/2-year highs on Wednesday, but the euro took the brunt of the strengthening dollar on a brighter economic outlook in the United States than for the euro zone.

The euro was at $1.2961, after falling to a three-month low of $1.2923 on Wednesday, also weighed by a lukewarm bond auction in Italy.

Italy sold €5.32 billion of new three- and 15-year government bonds, paying the highest yield since last December for the shorter-term debt, in its first bond auction since Fitch cut the country’s credit rating on Rome’s inconclusive elections last month.

Investors will turn to a Spanish bond auction scheduled later in the day, with Madrid offering debt maturing in 2029, 2040 and 2041.

Crude oil eased 0.2% to $92.34 a barrel.

 

TOUHID HUSSAIN 

PGDM 2nd SEM