Friday 30 September 2016

Asian shares rise to two-month highs, dollar gains on US data

Published 16/10/2015 | 07:06

An investor smiles in front of an electronic board showing stock information at a brokerage house in Hangzhou, Zhejiang province, China, October 15, 2015. REUTERS/China Daily
An investor smiles in front of an electronic board showing stock information at a brokerage house in Hangzhou, Zhejiang province, China, October 15, 2015. REUTERS/China Daily

Asian shares hit a two-month high today, catching some of Wall Street's shine after upbeat US price and jobless claims data calmed some concerns about the strength of the US economy.

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MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.4pc, on track for a robust weekly gain of 2.2pc

Japan's Nikkei stock index was up 1.4pc, but still poised to shed about 0.5pc for the week.

Wall Street logged solid gains overnight, after the number of Americans filing new applications for unemployment benefits fell back to a 42-year low last week. That suggested the labour market remained strong even though recent jobs data have sent mixed signals.

Also out overnight, the core consumer price index, which excludes food and energy costs, gained 0.2pc in September after ticking up 0.1pc in August, reviving some bets that the US Federal Reserve will deliver its first interest rate hike since 2006 as early as this year.

The Fed held policy steady last month, and expressed concerns that the slowing global economy, particularly in China, might pose a threat to the US economic outlook.

Rekindled rate-hike expectations lifted the dollar. The dollar index, which gauges the greenback against a basket of six major counterparts, was up 0.2pc at 94.512, but still on track for a weekly loss of about 0.3pc

The greenback also gained 0.2pc against the yen, buying 119.11 yen after pulling away from a 7-week trough of 118.065 struck overnight. The US currency was still poised to lose 1pc this week.

"It is doubtful the market tried to factor in the possibility of the Fed raising rates this year on the inflation number, but the Fed is 'data dependent' so it reacts positively to upbeat data," said Shinichiro Kadota, chief Japan forex strategist at Barclays in Tokyo.

But bets maintaining that the Fed will not raise rates until next year helped keep gold close to a 3 1/2 month high hit Thursday, and on track for its biggest weekly jump in four weeks.

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