Global Stocks Wobble on Fed's Dovish Note
February 23 2017 - 10:32PM
Dow Jones News
By Kenan Machado
Shares in Asia lost ground Friday as dovish signals from the
U.S. Federal Reserve weakened the dollar, with possible
consequences for the competitiveness of Asian exports.
The Nikkei Stock Average was down 0.2% with the S&P/ASX 200
off 0.7%. Hong Kong's Hang Seng Index was down 0.5%.
The minutes from the U.S. Federal Reserve's latest meeting
released earlier this week suggested the next interest-rate
increase would come "fairly soon." Some investors interpreted that
as a dovish signal that the Fed was backing away from a rate rise
in March.
The U.S. Dollar Index was flat in early Asian trade at 101.070
after slipping overnight. The dollar has perhaps lost some ground
on mixed messages on tax reform from the U.S. administration, said
Sean Callow, senior currency strategist at Westpac.
Yet the Australian dollar was down 0.1% against its American
counterpart after touching three-month highs. Against the Japanese
yen, the U.S. dollar fetched Yen112.83 in Asian morning trade.
Softer expectations for Fed rate increases have also hit U.S.
Treasury yields, with that on the two-year note dropping to 1.192%
from 1.224% Wednesday.
In other currency news, U.S. Treasury Secretary Steven Mnuchin
backed away from labeling China a currency manipulator, saying
Thursday that a decision would be reached on the matter before the
U.S. Treasury makes its usual report in April.
However the Chinese currency, the yuan, barely moved on the
comments.
South Korea's benchmark stock index, the Kospi, declined 0.5%
despite consumer confidence rising for the first time in four
months, and coming off an eight-year low in January.
Mr. Trump is set to address Congress on Tuesday, and may outline
some of his policy intentions. Yet there is skepticism in Asia
about how helpful these policies might be.
Markets are reacting to the risk of delay in fiscal stimulus
spending and the unwinding of some of the optimism that followed
President Trump's encouraging comments on tax reforms, said CMC
Markets chief market analyst Ric Spooner.
Write to Kenan Machado at kenan.machado@wsj.com
(END) Dow Jones Newswires
February 23, 2017 22:17 ET (03:17 GMT)
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