Asia markets rise for 11th straight session, Trump helps dollar bounce

Asian stocks extended their winning run to the 11th day on Friday, while the battered dollar won back some ground after President Donald Trump said he wanted a strong US currency.

European shares are expected to open higher, with spread-betters foreseeing a 0.3 per cent gain in Germany’s DAX and France’s Cac and a 0.4 per cent rise in Britain’s FTSE.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.25 per cent for the day, led by gains in Chinese financial and property shares.

It headed for its 11th straight day of gains, the longest sequence since 2015, and also for seventh straight week of gains for the first time since 2010.

Japan’s Nikkei ended down 0.2 per cent.

World equity markets have rallied over the past year, buoyed by a synchronised uptick in global economic growth in a boon to corporate profits and stock valuations.

Australian markets were closed for a public holiday.

The Dow and S&P 500 ended at their highest closing levels ever on Thursday although Wall Street relinquished bigger intraday gains after President Trump’s strong dollar comments.

Trump said on Thursday he ultimately wants the dollar to be strong, contradicting comments made by Treasury Secretary Steven Mnuchin one day earlier.

The dollar index against a basket of six major currencies was at 89.034. It had sunk to a three-year low of 88.438 on Thursday after Mnuchin said he welcomed a weaker greenback, which the markets initially took as Washington’s departure from its strong dollar policy.

“Trump did say he wanted a stronger dollar, but at the same time made no intention of changing his stance towards pursuing US interest through trade policies,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

“Comments from US top officials regarding the dollar are likely to continue lacking consistency going forward,” he said.

The euro was 0.2 per cent higher at $1.2426 but still some distance from $1.2538, its highest since December 2014 scaled on Thursday.

The common currency had soared to the fresh three-year high on Thursday after European Central Bank President Mario Draghi said economic data pointed to “solid and broad” growth with inflation likely to rise in the medium term from subdued levels.

Draghi also said the recent surge in the euro was a source of uncertainty, although this had little impact on the currency as some market participants had expected the ECB chief to use stronger language.

The dollar slipped 0.2 per cent to 109.42 yen, though it rebounded from a four-month low of 108.500 set the previous day.

The pound was 0.5 percent higher at $1.4205 following its ascent to a 1-1/2-year high of $1.4346 the previous day.

The Australian dollar climbed 0.5 per cent to $0.8059, edging back towards a four-month peak of set $0.8119 overnight.

Even if the Trump administration does push for a weaker dollar, the current US monetary policy trend was expected to complicate the agenda.

“Help from the Federal Reserve would be needed to weaken the dollar. But right now, the Fed is in midst of raising interest rates and this is not conducive to a weaker currency,” said Makoto Noji, senior strategist at SMBC Nikko Securities in Tokyo.

The Fed conducted three rate hikes in 2017 and is expected to tighten as many as three more times in 2018.

Oil prices fell ahead of the end of the peak-demand winter season in the northern hemisphere, although ongoing supply cuts and the weakening dollar offered broad support to the market.

US crude futures were 0.1 per cent lower at $65.43 per barrel after reaching $66.66 on Thursday, highest since December 2014.

Spot gold was a shade higher at $1,354 per ounce after sliding 0.8 per cent overnight. It set $1,366.06 earlier on Thursday, its highest since August 2016.