Asian stocks edged up to a three-month high on Wednesday, helped by a firm finish on Wall Street, while a rebound in the dollar looked vulnerable as some investors grew sceptical about US President Trump’s policies translating into further gains.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1 per cent to its highest levels since late October. Australia and Japan led regional stock markets higher.

“There has been a broad unwinding of short dollar positions in recent days but unless the scale of the likely fiscal stimulus from the US becomes clearer, prompting the Fed to become more hawkish, the dollar will trade in broad rangesagainst major rivals,” said Adarsh Sinha, an FX strategist atBank of America Merrill Lynch in Hong Kong.

The dollar snapped its recent losing streak and Treasury yields pushed higher overnight as Trump shifted his focus back to growth initiatives, including promising corporate tax breaks to fuel US investment, after focusing on protectionism in his first few days in office.

Trump had signed two executive orders on Tuesday to move forward with the construction of the controversial Keystone XL and Dakota Access oil pipelines, rolling back key Obama administration environmental actions in favour of expanding energyinfrastructure.

He also met chief executives of the Big Three US automakers and pressed them to build more cars in the United States.

The dollar halted a three-day losing streak against a basket of its trade-weighted rivals and pushed higher on Tuesday, though it dipped again slightly on Wednesday.

Sterling added to overnight gains and was trading at 1.2524 per dollar after Britain’s Supreme Court ruled that the government would need approval from Britain’s parliament before formally triggering the country’s departure from the European Union. It has bounced 4 per cent over last week.

“While some calm has come over the foreign exchange market in the past 18 hours, dealers are on a razor's edge,” saidStephen Innes, senior trader at online FX platform OANDA in Singapore.

Though the S&P 500 and Nasdaq set records on Tuesday in a broad rally led by financial and technology stocks, market valuations looked stretched according to some metrics.

The S&P 500 is trading at about 17 times forward 12-month earnings, according to Thomson Reuters Data stream, compared with the 10-year median of 14.2

In bond markets, US Treasury yields rose with two-year benchmark yields holding firm at 1.22 per cent compared with 1.15 per cent on Tuesday, reflecting strong economic conditions. Ten year yields were at 2.47 per cent.

Oil prices consolidated overnight gains. Brent futures dipped 13 cents or 0.2 per cent to $55.31 per barrel, after rising 0.4 per cent overnight.

Renewed optimism over Trump’s growth policies took the wind out of a recent rally in safe-haven gold, which steadied at around $1,210 per ounce.

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