Share

Dollar, Asia stocks track global losses on US uncertainty

Hong Kong - The dollar struggled to recover on Friday and Asian markets suffered fresh losses after Treasury Secretary Steven Mnuchin lowered US growth expectations and appeared to temper Donald Trump's belligerence towards China's currency policy.

While New York's blue-chip Dow index hit a record tenth successive all-time high, the Trump-fuelled global rally is showing signs of petering out with analysts suggesting the exuberance about hoped-for spending and tax cuts may have been overdone.

That appeared evident after Mnuchin forecast three percent growth by the end of next year, warning that the effect of certain measures would take time. That compared with the four percent Trump promised on the campaign trail.

In an interview with CNBC, Mnuchin also appeared to wind back on his boss's earlier threats to call China a currency manipulator, easing concerns about a possible trade stand-off between the world's top two economic powers.

Stephen Innes, senior trader at OANDA, said in a note the comments "have left investors dangling about the US administration currency policy as there appears to be a subtle shift in the Trump administration's rhetoric".

The comments overshadowed his promise to push through tax cuts by August, and pursue deregulation on companies and banks.

"One reason the market is reading a great deal into (Mnuchin's) views is the proximity of the comments to President Trump's speech before a joint session of Congress next Tuesday," Innes added.

Peso rebounds

The dollar tumbled against the yen and pound in New York and while it made some inroads on Friday the unit was still under pressure.

It remained wedged below ¥113 while the pound held its gains in the mid-$1.25 range.

High-yielding currencies also pushed ahead, with the Australian dollar up 0.2% and South Korean won 0.4% higher.

Mexico's peso surged more than one percent to sit at levels not seen since just after Trump's November 8 election win as the country's leaders stand up to the new US administration's threats over trade, a border wall and immigration.

"Traders and investors are seeing the effect of the Mexican stance in tempering the US administration's overt aggression and making a determination that the worst fears they held for the peso and the Mexican economy were overblown," said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.

Asian equity markets extended the previous day's losses. Tokyo's Nikkei ended the morning session 0.2% lower as the stronger yen hurt exporters, while Hong Kong was down 0.5% and Sydney 0.7% off.

Shanghai shed 0.4%, Singapore retreated 0.5% and Wellington slipped 0.3%.

With uncertainty returning to markets after a February rally, gold - considered a safe bet in times of market turmoil - rose almost one percent to $1 250.

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.88
+0.3%
Rand - Pound
23.86
+0.2%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.33
+0.1%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders