Asia shares retreat from nearly 2- year peak, while dollar firms

Greenback benefits from Brexit concerns

Asian shares turned lower on Thursday after touching a near two- year high, while the dollar benefited from waning expectations that the European Central Bank ( ECB) was poised to end its easy policy.

MSCI’s broadest index of Asia- Pacific shares outside Japan was down 0.2 percent, stepping back from morning trade when it approached its loftiest level since June 2015.

Australian shares firmed 0.4 percent, helped by an overnight gain in oil prices. Strong energy shares had helped the S& P 500 finish higher overnight.

The Federal Reserve’s monetary outlook and policymaking under US President Donald Trump have held sway in financial markets over the past few months. While investors have more or less come to terms with rising rates in the US, concerns remain around the Trump administration’s ability to get growth into a higher gear.

Last week’s failure of Trump’s US healthcare reform bill reinforced those doubts.

The dollar index, which tracks the US currency against a basket of six major rivals, was slightly up on the day at 100.030. It was lifted to a oneweek high overnight as the euro slipped on concerns about the impact of Brexit as well as news that ECB policymakers are keen to reassure investors that their easy- money policy is far from ending.

The euro was down 0.1 percent at $ 1.0756, after Reuters reported ECB policymakers were wary of changing their policy message following tweaks this month that upset investors and raised the specter of a surge in borrowing costs.

Prime Minister Theresa May formally began the UK’s exit from the EU on Wednesday, launching a two- year negotiation process.

Sterling steadied at $ 1.2438 after skidding to a one- week low of $ 1.2377 overnight.

“Brexit, to some extent, has been covered in the market already. People went short, covered, and went short again,” said Kaneo Ogino, director at foreign exchange research firm Global- info Co in Tokyo.

“As for the dollar, demand is still steady from pure commercial orders, but the Japanese fiscal year ends this week, and Tokyo investors don’t want to take new positions,” Ogino said.