BCN-04,05 Asian markets rally after Wall St record, dollar eases

315

ZCZC

BCN-04

ASIA-MARKETS

Asian markets rally after Wall St record, dollar eases

HONG KONG, Aug 27, 2018 (BSS/AFP) – Asian markets rallied on Monday
following a record lead from Wall Street, while the dollar remained under
pressure after the head of the Federal Reserve suggested it would not speed
up its pace of lifting interest rates.

Jerome Powell said the US economy was healthy and prices showed no sign of
rising more than the bank’s two percent target, adding that there appeared to
be no risk of overheating.

The remarks at the annual Jackson Hole bankers’ symposium in Wyoming on
Friday were taken by observers as an indication the Fed will stick to its
gradual increases in borrowing costs, which weighed on the dollar but
provided a boost to equities.

The S&P 500 and Nasdaq closed at fresh records, while the dollar dropped
across the board, with Asian traders extending that trend on Monday.

Tokyo ended the morning 0.7 percent higher, Hong Kong jumped 1.3 percent,
Shanghai added 0.8 percent and Singapore put on 0.6 percent. There were also
gains in Wellington, Taipei and Jakarta, while Sydney and Seoul were flat.

In forex trading the dollar retreated against its major peers as well as
high-yielding currencies, with Mexico’s peso boosted by news that US and
Mexican officials were close to a deal on a revised free-trade pact.

The yuan also won support after the People’s Bank of China said Friday it
had made a policy tweak to prevent the currency from falling too sharply.

The central bank adjusted the way it fixes the unit’s midpoint each day as
it looks to provide more stability at a time when the dollar is broadly in
the ascendance.

It also comes as leaders try to temper trade tensions with the United
States, with Donald Trump accusing Beijing of keeping the yuan artificially
low to boost its exports and offset the impact of tariffs.

The move “should calm both local and international investors that this
move does signal the PBoC has no intention of moving into a full-scale
currency war in the trade war escalations”, said Stephen Innes, head of Asia-
Pacific trading at OANDA.

MORE/HR/0923

ZCZC

BCN-05

ASIA-MARKETS 2 LAST HONG KONG

He also said the euro could face headwinds after Italy’s populist
government threatened to withdraw European Union funding unless it agrees to
take some of the 150 people stranded on an Italian coastguard ship.

“I expect the market to start fading on this recent euro move because of
Italy’s risk, which matters because it’s enormous and the ECB is more than
content sitting on their hands,” Innes said.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 0.7 percent at 22,759.53 (break)

Hong Kong – Hang Seng: UP 1.3 percent at 28,018.18

Shanghai – Composite: UP 0.8 percent at 2,750.64

Euro/dollar: UP at $1.1630 from $1.1623 at 2040 GMT Friday

Pound/dollar: UP at $1.2850 from $1.2847

Dollar/yen: UP at 111.23 yen from 111.21 yen

Oil – West Texas Intermediate: DOWN 10 cents at $68.62 per barrel

Oil – Brent Crude: DOWN nine cents at $75.73 per barrel

New York – Dow Jones: UP 0.5 percent at 25,790.35 (close)

London – FTSE 100: UP 0.2 percent at 7,577.49 (close)

BSS/AFP/HR/0925