Dollar weakens after rally as Asia markets struggle

The losses tracked a decline on Wall Street after it emerged China had seized an unmanned US sea survey probe from international waters in the South China Sea.

AFP, HONG KONG: The dollar retreated against most major peers in Asian trade yesterday as investors cashed in after a Federal Reserve-fuelled surge last week, while equities were also lower due to China-US tensions.
The losses tracked a decline on Wall Street after it emerged China had seized an unmanned US sea survey probe from international waters in the South China Sea.
Thursday’s move raised geopolitical concerns as Donald Trump prepares to enter the White House, having hit out at Beijing in recent weeks over several issues from Taiwan to trade.
Last week the dollar soared after the Fed raised borrowing costs and hinted at three more increases next year—surprising many who had priced in two—as it prepares for steeper price rises if Trump honours promises of tax cuts and big infrastructure spending.
But in afternoon trading Monday the greenback was down against the yen, euro and pound, while some emerging market currencies
—which were hammered by 
a flight of cash to the dollar—were also up.
However, the Malaysian ringgit touched lows not seen since the 1998 Asian financial crisis.
“I can’t see the dollar index in a sustained rally—two rate hikes are priced into fed funds futures, and a lot of expectation is built into Trump’s policies,” Janu Chan, a senior economist at St. George Bank in Sydney, told Bloomberg News.
“On the other side of the equation, the (European Central Bank) and (Bank of Japan) are not likely to ramp up monetary stimulus any more. Profit-taking is most likely behind current US dollar weakness but it’s possible it’s also due to geopolitical concerns on the reports that China seized the US drone.”
Not-so super Mario 
On stock markets Japan’s Nikkei closed in negative territory, the first loss after nine successive gains.
The index ended down 0.1 percent, with Nintendo diving more than seven per cent as its new game Super Mario Run received tepid reviews, a far cry from the global phenomenon that was Pokemon Go earlier this year.
The firm’s shares fell more than four per cent Friday.
“Investor expectations were very strong,” said Hideki Yasuda, an analyst at Ace Research Institute. “There are a lot of people writing on the App Store that Super Mario Run isn’t very fun. Perhaps expectations were too high.”
Hong Kong closed down 0.9 per cent, Shanghai ended down 0.2 per cent and Singapore lost 0.8 per cent, while Seoul slipped 0.2 per cent. 
There were also sharp losses in Taipei, Jakarta and Manila.
However, Sydney added 0.5 per cent as the government stuck to its plan to return the budget to surplus by 2021 and despite downgrading forecasts for economic growth, with fears growing it could lose its AAA credit rating.
In early European trade London was flat, Paris fell 0.3 per cent and Frankfurt lost 0.2 per cent.

Dollar weakens after rally as Asia markets struggle

The losses tracked a decline on Wall Street after it emerged China had seized an unmanned US sea survey probe from international waters in the South China Sea.

AFP, HONG KONG: The dollar retreated against most major peers in Asian trade yesterday as investors cashed in after a Federal Reserve-fuelled surge last week, while equitieswere also lower due to China-US tensions. The losses tracked a decline on Wall Street after it emerged China had seized an unmanned US sea survey probe from international waters in the South China Sea. Thursdays move raised geopolitical concerns as Donald Trump prepares to enter the White House, having hit out at Beijing in recent weeks over several issues from Taiwan to trade. Last week the dollar soared after the Fed raised borrowing costs and hinted at three more increases next yearsurprising many who had priced in twoas it prepares for steeper price rises if Trump honours promises of tax cuts and big infrastructure spending. But in afternoon trading Monday the greenback was down againstthe yen, euro and pound, while some emerging market currencies which were hammered by a flight of cash to the dollarwere also up. However, the Malaysian ringgit touched lows not seen since the 1998 Asian financial crisis. I cant see the dollar index in a sustained rallytwo rate hikes are priced into fed funds futures, and a lot of expectation is built into Trumps policies, Janu Chan, a senior economist at St. George Bank in Sydney, told Bloomberg News. On the other side of the equation, the (European Central Bank) and (Bank of Japan) are not likely to ramp up monetary stimulus any more. Profit-taking is most likely behind current US dollar weakness but its possible its also due to geopolitical concerns on the reports that China seized the US drone. Not-so super Mario On stock markets Japans Nikkei closed in negative territory, the first loss after nine successive gains. The index ended down 0.1 percent, with Nintendo diving more than seven per cent as its new game Super Mario Run received tepid reviews, a far cry from the global phenomenon that was Pokemon Go earlier this year. The firms shares fell more than four per cent Friday. Investor expectations were very strong, said Hideki Yasuda, an analyst at Ace Research Institute. There are a lot of people writing on the App Store that Super Mario Run isnt very fun. Perhaps expectations were too high. Hong Kong closed down 0.9 per cent, Shanghai ended down 0.2 per cent and Singapore lost 0.8 per cent, while Seoul slipped 0.2 per cent. There were also sharp losses in Taipei, Jakarta and Manila. However, Sydney added 0.5 per cent as the government stuck to its plan to return the budget to surplus by 2021 and despite downgrading forecasts for economic growth, with fears growing it could lose its AAA credit rating. In early European trade London was flat, Paris fell 0.3 per cent and Frankfurt lost 0.2 per cent.