Comments
The US dollar hovered close to an 11-year high against a basket of currencies, while Asian shares firmed in early trade on Tuesday, with the sentiment bolstered by another record day on Wall Street.
MSCI’s broadest index of Asia-Pacific shares outside Japan was nearly flat, while Japan’s Nikkei stock average was up about 0.4 per cent after the yen pushed to three-week lows against the greenback.
On Wall Street on Monday, the Dow Jones industrial average and the S&P 500 both posted fresh record closing highs, while the Nasdaq Composite broke 5,000 for the first time in 15 years.
Dollar index
The dollar index climbed as far as 95.514 on Monday, surpassing January 23’s high of 95.481 to a peak not scaled since September 2003.
The index rose as the euro slid back below $1.1200. The common currency last stood at $1.1177, down about 0.1 per cent, while the dollar edged up about 0.1 per cent against the yen on the day to 120.19 after touching a fresh three-week high of 120.27.
The dollar’s gains came in spite of a batch of downbeat US data, including another fall in US consumer spending and slower factory activity.
“The market’s relentless appetite for US dollars is impressive considering that the latest economic reports hardens our view that the Federal Reserve will raise interest rates in September and not in June,’’ Kathy Lien, managing director at BK Asset Management, said in a note to clients.
US jobs report
The main data focus for the market this week will be Friday’s US jobs report for February. Employers are expected to have added 240,000 jobs in the month, according to the median estimate of 100 economists polled by Reuters.
A strong reading is likely to heighten expectations that the Fed will opt to hike interest rates by the middle of this year.
RBA rate cut
In contrast, the market appears to be betting the Reserve Bank of Australia will deliver a back-to-back interest rate cut later on Tuesday.
As a result, the Aussie dollar has fallen back to $0.7754 from a recent high of $0.7914.
Traders said an “on hold’’ decision by the RBA should spark a short-covering rally in the Aussie. Conversely, a cut accompanied by a dovish statement could see it fall towards a six-year trough of $0.7627 set a month ago.
Economists polled by Reuters late last week were just about evenly split on whether the RBA will lower the cash rate by another quarter point to a record low 2.0 percent.
A sharp selloff in Brent crude kept some investors cautious. Brent was down 4.1 per cent at $59.99 a barrel after Iran said a deal on its nuclear programme could be reached this week if the West lifts sanctions, which could boost the country’s oil exports.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.