Dollar soars on upbeat U.S. data but Asian stocks wobble

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HONG KONG (Businesshala) – The dollar strengthened through key resistance levels on Wednesday, driven by better-than-expected U.S. retail data, though upbeat news wasn’t enough to lift Asian stocks, which are reeling under the threat of COVID-19 and higher. were dragged by concerns about Cost.

FILE PHOTO: A man watches the stock market in Taipei on January 22, 2008. Businesshala/Nikki Loh

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.5% from Tuesday’s three-week high, and was set for its biggest fall this month, posting seven days of gains.

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Japan’s Nikkei fell 0.3% on fears that a stronger dollar would mean higher costs of imported materials for manufacturers.

The dollar hit a high of 114.97 yen in early Asian hours, its strongest since March 2017, while the euro fell to $1.1263, its lowest level since July 2020.

The greenback was helped by Tuesday’s data that showed US retail sales rose faster than expected in October, potentially encouraging the US Federal Reserve to accelerate its asset purchase program, as inflation remained too high. happened.

These also weighed on the US Treasury, with the benchmark 10-year note yield reaching 1.649% in early Asia, a three-week high.

Rob Carnell, head of research for Asia Pacific at ING, said: “The data supports the sentiment that things are going very well, and the Fed could be a little more aggressive if it wanted to be without completely crashing the party.” Is.”

“Top of mind for everyone is inflation, it’s still an issue we got from the US yesterday, and we’ve got a whole barrage of other inflation data coming in today, especially the UK and Canada,” he said.

Britain published its October inflation data later on Wednesday, which looked likely to increase pressure on the Bank of England in December after surprising markets by setting them on fire last month.

FTSE futures slipped 0.37%, pointing to a weaker open for British stocks, while pan-region Euro Stoxx 50 futures and US S&P 500 futures were flat.

“It’s not about the Biden-Xi summit, which had the potential to do harm, but it doesn’t seem to,” Cornell said.

In a three-hour meeting on Tuesday, US President Joe Biden and Chinese leader Xi Jinping shrugged off some heat in Sino-US tensions, though both sides strengthened their positions on a range of issues.

Asian stocks rose marginally on Tuesday on a positive trend, but proved to be short-lived.

On Wednesday, South Korea’s KOSPI fell 1.2% when the country reported the second highest daily new coronavirus infections since the pandemic began.

Australian shares fell 0.7%, weighed by Commonwealth Bank of Australia, the country’s largest bank, slipping 8% after margins were hit by a low interest rate environment and mortgage competition.

Chinese blue chips were steady and the Hong Kong benchmark slipped 0.4%, as a short rally in developer and casino stocks ran out of steam.

US gasoline inventories fell more than expected last week after plunging oil prices increased pressure on US officials to release oil from emergency reserves.

US crude fell 0.87% to $80.06 a barrel. Brent crude fell 0.5% to $81.69 a barrel.

Spot gold rose 0.25% to $1,854 an ounce, having climbed a five-month high of $1,876.9 a day earlier, on rising inflation concerns.

Rival inflation hedge bitcoin fell 0.8% to $59,500, down 5% from a day earlier.

Editing by Sam Holmes

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