Soft US data hits dol­lar but mar­kets rally

The Myanmar Times - - International Business -

FAD­ING ex­pec­ta­tions of a US in­ter­est rate rise this year hit the dol­lar and boosted stocks in Asia yes­ter­day, al­though Shang­hai eq­ui­ties took a ham­mer­ing from weak Chi­nese man­u­fac­tur­ing data.

The July 29 re­port show­ing the world's num­ber one econ­omy ex­panded just 1.2 per­cent year-on-year in April-June poured cold wa­ter on spec­u­la­tion the Fed­eral Re­serve will raise in­ter­est rates be­fore year-end.

It also came hours after the Bank of Ja­pan dis­ap­pointed in­vestors by de­cid­ing against ramp­ing up its stim­u­lus pro­gram.

The two events stung the green­back, which ended July 29 just above the 102 yen mark, well down from lev­els around 106 yen touched the day be­fore.

In Asian trade, the dol­lar edged up slightly against the Ja­panese cur­rency to 102.47. But it lost ground against the South Korean won, In­done­sian ru­piah and Malaysian ring­git, which jumped 0.8pc.

Forex traders are ex­pect­ing Ja­panese Prime Min­is­ter Shinzo Abe to out­line de­tails of the gov­ern­ment's 28 tril­lion yen stim­u­lus to­day.

The like­li­hood of US in­ter­est rates re­main­ing low sup­ported Asia's eq­uity mar­kets, how­ever.

Ja­pan's Nikkei ended up 0.4pc, hav­ing re­cov­ered from early losses fu­elled by the strong yen, while Taipei, Manila and Sin­ga­pore posted healthy gains. Hong Kong ral­lied 1.1pc, Syd­ney ended 0.5pc higher and Seoul jumped 0.7pc.

But Shang­hai ended down 0.9pc after of­fi­cial fig­ures showed China's pur­chas­ing man­agers' index of man­u­fac­tur­ing ac­tiv­ity in­di­cated the sec­tor shrank last month – the first time since Fe­bru­ary.

The data is the lat­est bad news on the world's num­ber two econ­omy, which is grow­ing at its slow­est rates in a quar­ter of a cen­tury. –

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