Dollar sheds gain on US concerns, Asia stocks tread water

Wednesday, 26 July 2017 00:00 - - {{hitsCtrl.values.hits}}

Oil rises on Saudi pledge to cut exports

Singapore (Reuters): The dollar surrendered short-lived gains on Tuesday as concerns about the US economy and politics returned to the fore ahead of a Federal Reserve meeting, while a lack of catalysts kept Asian stocks subdued.

European stocks look set for a stronger open, with financial spreadbetter CMC Markets expecting Britain’s FTSE 100 Germany’s DAX and France’s CAC 40 to all open about 0.3% higher.

The dollar earlier rose on expectations the Fed will signal at a meeting starting later on Tuesday its readiness to begin reducing its bond portfolio at its September meeting.

Also lifting the dollar earlier were strong July manufacturing and services purchasing managers’ surveys (PMIs). But then it fell back as investors feared that the surveys would not shake the Fed’s cautious approach to monetary policy tightening.

The dollar fell 0.1% to 110.99 yen on Tuesday, after touching a six-week low of 110.65 yen on Monday. The dollar index, which tracks the greenback against a basket of six major peers, pulled back a little to 93.919 on Tuesday. It still remained above Monday’s low of 93.823, its lowest level since June 2016. The euro, which posted losses on Monday after earlier hitting a near two-year high, inched up 0.1% to$1.1656.

In stocks, MSCI’s broadest index of Asia-Pacific shares outside Japan edged up less than 0.1%, with some markets looking for fresh impetus after hitting multi-year highs in recent weeks and few drivers in the region to guide them.

Overnight on Wall Street, the Nasdaq set a record high as investors bet on solid earnings from technology companies. But the S&P 500 and the Dow closed in negative territory, following European stocks, which lost 0.2% on Monday.

In commodities, oil prices extended their recovery on a pledge by leading OPEC producer Saudi Arabia to cut exports in August to help reduce the global crude glut. Haliburton Co’s executive chairman also said the U.S. shale drilling boom would probably ease next year. U.S. crude jumped 0.6% to $46.63 a barrel, after closing up 1.25% on Monday. Global benchmark Brent added 0.55% to $48.87, extending Monday’s 1.1% rise.

The moderation in the dollar helped gold pull up, with the precious metal edging up almost 0.1% to $1,255.87 an ounce.

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