Skip to main content

GLOBAL MARKETS - Currencies in focus as Obama tours Asia



SYDNEY (Reuters) - A rare rally in the U.S. dollar was the focus in Asia on Friday as investors wondered if President Barack Obama's nine-day visit to the region would generate pressure on some countries to let their currencies rise.

The bounce in the long-suffering dollar added to profit-taking in commodities such as gold and oil, while weakness in shares across Asia supported the dollar as a safe-haven trade.

Obama kicks off his first official tour of Asia by meeting Japanese Prime Minister Yukio Hatoyama on Friday, then goes on to Singapore, China and South Korea.

High on the agenda will be U.S. calls for Asian countries to do more to stimulate domestic demand instead of relying on exports to America. That would likely require much of Asia, and China in particular, to let their currencies appreciate. But there's an inherent contradiction in the U.S. stance.

Treasury Secretary Timothy Geithner often states his desire to see a strong dollar, yet at the same time wants Asian exporters to let their currencies gain ground against the dollar.

Leaders of Asia Pacific Economic Cooperation seemed to give ground this week by backing undefined "market-oriented" exchange rates. Yet many of the same countries were spotted intervening to buy the dollar to stop a rise in their own currencies that could make their exports less competitive and impede their economic recovery.

Traders said this burst of buying caught many speculators short and was a major reason the U.S. dollar bounced so far.

The euro had pulled back to $1.4858 , from Thursday's peak around $1.5048, while the dollar reached 90.30 yen from the week's 89.26 trough.

Against a basket of currencies the dollar was up at 75.596 and off 15-mth lows of 74.774, though it remains within a downtrend channel that stretches back to May.

The dollar's rise added to pressure on oil, already burdened by a surprisingly large increase in U.S. crude inventories. U.S. crude oil futures for December delivery were off 38 cents at $76.56, after shedding 3 percent on Thursday.

Likewise, spot gold was dragged down to $1,103.60 per ounce, from a record peak of $1,122.95.

U.S. CONSUMER FATIGUE

Most share markets in Asia tracked Thursday's fall in U.S. stocks, which snapped a six-day winning streak.

The Dow Jones average dropped 0.91 percent on Thursday to 10,197.47, while the Standard & Poor's 500 Index fell 1.03 percent to 1,087.24.

The MSCI index of Asia Pacific stocks outside Japan followed on Friday, sliding 0.9 percent at 407.24.

Some market watchers blamed the reversal on concerns about U.S. shoppers. A return of strong consumer demand is vital for a sustainable recovery in the world's largest economy.

On Thursday, Wal-Mart Stores Inc forecast earnings during the key holiday quarter could miss Wall Street estimates as its customers face rising unemployment.

"It is inevitable for exporters in Korea and China to be hit as U.S. retailers are unlikely to enjoy the holiday shopping season," said Choo Hee-yeop, a strategist at Korea Investment & Securities.

In Japan, the benchmark Nikkei fell 0.5 percent after snapping a four-day rising streak on Thursday and looked headed for its lowest close in a week. The broader Topix was flat at 867.50.

Struggling Japan Airlines Corp as well as a slew of banks including No. 2 lender Mizuho Financial Group and No. 3 bank Sumitomo Mitsui Financial Group announce earnings results later in the day.

Source : reuters.com

Tags : business news headlines, world business news, financial business news, daily business news, current business news, business news today

Comments

Popular posts from this blog

Kerala boat tragedy: Thirty five bodies have been fished out of the water

THEKKADY / KOCHI: A thick veil of grief descended on the famed tourist spot of Thekkady on Wednesday when Kerala witnessed its worst ever boat tragedy in the Mullaperiyar waters as the KTDC’s Jalakanyaka, carrying about 76 passengers, sank. Thirty five bodies have been fished out of the water. Any hope of finding more tourists alive faded with the daylight even as rescue personnel continued their desperate search. The two-deck boat, commissioned just a month back, was returning to the boat landing after an hour-long sight-seeing trip when tragedy struck. All the passengers on the upper deck apparently rushed to one side of the boat to take photos of a lone bison spotted on the shore. At the same time many from the lower deck flocked to the top leaving the lower almost empty. This movement and the uneven distribution of weight caused the boat to overbalance and turn turtle. Those remaining on the lower deck were trapped inside while about 20 on the upper deck were rescued by other boa

Special Status For Jammu & Kashmir Scraped: 5 Points About Article 370

Jammu & Kashmir will also be "reorganized," Home Minister Amit Shah said as talks about the state being trifurcated into three separate fields- Jammu, Kashmir and Ladakh NEW DELHI: Article 370, which gives Jammu & Kashmir unique status, will be withdrawn this morning in parliament, Home Minister Amit Shah said . The announcement came after his cabinet meeting at his house this morning was held by Prime Minister Narendra Modi . Article 370 is a ' temporary provision ' granting special autonomous status to Jammu & Kashmir . It allows the state to draft its own Constitution and restricts the legislative powers of the parliament over the state. The government therefore requires state government approval for all legislation, except those related to defence, foreign affairs, finance, and communications. Parliament can not also improve or decrease the boundaries of the State under Article 370 As a consequence, citizens of Jammu & Kashmir

Enai Nokki Paayum Thotta Movie Review: Tiring and Unsatisfying

Movie Rating: 3/5 First of all things! The director's weakest film is the long delayed Enai Noki Paayum Thotta by Gautham Menon . The film's main weakness is the director's fascination with narrative style voice-over. It was good before Gautham used voice-over as a medium to tell his stories, but every scene in Enai Nokki Paayum Thotta begins and ends with Dhanush's voice-over, which irritates us after a point. The film is filled with tired stereotypes, and at a runtime of 157 minutes it is an unsatisfying watch. Like any other movie from Gautham Menon, here too hero Raghu (Dhanush) is a student of engineering, but this time his wife is not a student, but a film heroine Lekha ( Mega Akash ).She tells him she is not interested in movies and her boss Kuberan (Senthil Veeraswamy) coerced her into the profession for money (it looks like the girl is an orphan and Kuberan supported her studies and is her guardian). Raghu takes her to his Pollachi house and introduc