Dollar on defensive, Asia shares make fresh highs
The dollar stayed on the defensive on Wednesday as investors wagered any further tightening in the United States would be slow at best, while optimism on China`s economy underpinned Asian shares and commodities.
The U.S. currency was near multi-month lows after the collapse of the Republicans` push to overhaul healthcare dealt a blow to President Donald Trump`s ability to pass promised tax cuts and infrastructure spending.
The diminished prospect of fiscal spending was a boon to bonds, especially as a run of soft U.S. inflation results had lessened the risk that the Federal Reserve would need to be aggressive in removing its stimulus.
As a result yields on 10-year Treasury notes
That in turn undermined the U.S. dollar which hit its lowest since September against a basket of currencies <.dxy>. Early Wednesday it had steadied for the moment at 94.689, but was still down over 7 percent on the year so far.
The euro was firm at $1.1551
The dollar also carved out a two-year low on the Australian dollar and a one-year trough on the Swiss franc
Losses have been more limited against the yen as the Bank of Japan has stuck with its massive stimulus campaign and stopped yields there from rising. The dollar was trading at 111.98
Speculation that the Bank of England might soon tighten was also dealt a blow by surprisingly soft inflation figures at home, giving the dollar a leg up on the pound
In Asia, investor sentiment has also been supported by a raft of upbeat economic news out of China. MSCI`s broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was up 0.16 percent in early trade at its highest since April 2015.
Australia`s main index <.axjo> climbed 0.7 percent, but the strength of the yen nudged Japan`s Nikkei <.n225> down 0.1 percent.
Wall Street had ended Tuesday mixed after a heavy dose of corporate earnings, with the Dow dragged by Goldman Sachs
The Dow <.dji> fell 0.25 percent, while the S&P 500 <.spx> gained 0.06 percent and the Nasdaq <.ixic> 0.47 percent.
The Nasdaq`s run of gains was saved by Netflix
The drop in the dollar and optimism on Chinese demand helped underpin commodities, with everything from copper to iron ore on the rise. Spot gold also added another 0.1 percent to $1.243.36 per ounce
Oil prices eased back after climbing on Tuesday. U.S. crude
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.