Euro ruffled by Spanish vote, Asia data cheer stocks

SYDNEY: The euro took a knock in Asia yesterday as investors kept an anxious eye on an independence vote in Spain’s Catalonia, while surprisingly strong economic news out of China and Japan offered support to equities and commodities.

The euro fell 0.3 per cent after the violence-marred vote to trade at US$1.1773, though European bourses seemed less troubled with financial bookmakers pointing to small opening gains for the major indices.

Spanish police used batons and rubber bullets to thwart an independence vote in Catalonia on Sunday in a show of force that left hundreds injured, according to Catalan officials, and presented Madrid with a huge challenge to calm tensions in the region.

The situation was fluid, with the head of the regional government opening the door to a potential declaration of independence from Spain.

Dealers emphasised there had been no major selling of euros as yet and neither was there any flow to safe havens, with investors reserving judgement.

As a result, the dollar was firmer on the Japanese yen at 112.86 and up 0.3 per cent on a basket of currencies at 93.349. Gold eased in response to US$1,274.24.

The dollar was aided by speculation President Donald Trump might choose former Federal Reserve Governor Kevin Warsh to head the central bank.

Warsh is considered more hawkish than current chair Janet Yellen so his appointment might lead to faster hikes in interest rates. — Reuters