Asia stocks weaker, dollar slips as Fed continues to weigh
The weaker dollar boosted gold, which added 0.2% to $1,230.50 an ounce in early trade.
Asian stocks were slightly weaker early on Monday, following Wall Street`s declines and the G20`s decision to drop a pledge to avoid trade protectionism, while the Federal Reserve`s seemingly dovish stance last week continued to drag the dollar lower.
MSCI`s broadest index of Asia-Pacific shares outside Japan was fractionally lower. Japan is closed for a holiday. On Friday, Wall Street was flat to negative, dragged lower by bank shares that fell along with Treasury yields.
Financial leaders from the world`s biggest economies reiterated their warnings against competitive devaluations and disorderly foreign exchange markets at the meeting in the German town of Baden-Baden over the weekend.
But they failed to agree on a commitment to keep global trade free and open, highlighting a global shift towards protectionism.
"Essentially it`s a result of the US protectionist stance, something (President Donald) Trump has been very clear on and the market is well aware of this," James Woods, global investment analyst at Rivkin Securities in Sydney, said.
"Importantly we saw other leaders such as (Japanese Prime Minister) Shinzo Abe and (German Chancellor) Angela Merkel come out publicly supporting free trade, and for now the protectionist stance remains constrained to the US It would be more concerning if this began spreading to other countries."
The dollar, however, didn`t react to the statements from the meeting, hovering close to its near-three-week low touched on Friday. It traded 0.1% lower at 112.57 yen. The dollar index, which tracks the greenback against a basket of six trade-weighted peers, inched lower to 100.26, having touched a 5 1/2-week low on Friday.
Markets are focused on a raft of speeches by Federal Reserve officials this week, including Chicago`s Charles Evans on Tuesday and Friday, Chair Janet Yellen on Thursday and Dallas` Robert Kaplan and Minneapolis`s Neel Kashkari on Friday and New York`s William Dudley on Saturday.
The euro climbed 0.1% to $1.0748 after riding the relief over the Netherlands election defeat of anti-European Union candidate Geert Wilders to hit a near-six-week peak on Friday.
Attention now turns to the French election, with the first Presidential debate set to take place on Monday. Opinion polls show independent centrist Emmanuel Macron would lead far-right leader Marine Le Pen by a hair in first-round voting, before beating her in the run-off.
In commodities, oil prices continued their downward trend as doubts grew about the effectiveness of OPEC cuts in containing a supply glut as US inventories continue to climb.
U.S. crude fell 0.6% to $48.50 a barrel.
The weaker dollar boosted gold, which added 0.2% to $1,230.50 an ounce in early trade.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Power of Compounding: How many years will it take to reach Rs 3 crore corpus if your monthly SIP is Rs 4,000, Rs 5,000, or Rs 6,000
IRCTC Dividend 2024: Railway PSU announces 200% interim dividend - Check record date and other details
Power of Compounding: Salary Rs 25,000 per month; is it possible to create over Rs 2.60 crore corpus; understand it through calculations
Reduce Home Loan EMI vs Reduce Tenure: Rs 75 lakh, 25-year loan; which option can save Rs 25 lakh and 64 months and how? Know here
New Year Pick by Anil Singhvi: This smallcap stock can offer up to 75% return in long term - Check targets
PSU Oil Stocks: Here's what brokerage suggests on these 2 largecap, 1 midcap scrips - Buy, Sell or Hold?
08:07 AM IST