Asian stocks retreat, dollar extends gains
provide some forward guidance to markets.
“The Fed has doubled down on its confidence that the US economy is still on track for more rate rises and growth will bounce back from the first quarter’s moribund pace,” Greg McKenna, chief market strategist at AxiTrader, said in a note.
The dollar headed towards the ¥113 mark yesterday, building on a recent rally, while it held up against the euro and the pound. It also advanced against most high-yielding currencies including the Australian dollar, Indonesia’s rupiah and the Thai baht.
“The Federal Reserve remains on track to deliver two more interest rate hikes this year as it focuses on the steady decline in the unemployment rate, rather than fluctuations in (economic) growth,” said Richard Jerram, chief economist at Bank of Singapore.
Despite the positive spin from the Fed, Asian equities mostly struggled yesterday in a week that has seen several markets closed for various public holidays.
Hong Kong slipped 0.1%, Shanghai ended down 0.3%, Singapore shed 0.4% and Taipei fell 0.4%. Sydney sank 0.3% on a drop in iron and copper prices.
Seoul’s Kospi ended 1% up at a record high thanks to a pick-up in foreigners entering the South Korean market and improving corporate results. The Kospi has been on a consistent upward trend since December, driven by rising expectations and profits.
Meanwhile, European stock markets rose in morning trading.
London’s benchmark FTSE 100 index was 0.4% higher approaching midday in the capital. In the eurozone, Frankfurt’s DAX 30 and the Paris CAC 40 each grew 0.8% compared with Wednesday’s closing values and ahead of France’s weekend presidential election.
The dollar fell back against the euro following the French presidential debate and after gains for the US currency on Wednesday when the Federal Reserve opened the door for another interest rate increase next month. – AFP