Dollar Extends Drop on Trump Remarks; Stocks Gain: Markets Wrap
Bloomberg.com — The dollar extended a decline against major peers on comments from U.S. President Donald Trump, and most Asian stocks gained after U.S. equities flirted with record highs.
The greenback accelerated a slide after the euro broke through the key $1.15 level amid thin summer liquidity. It had weakened earlier after a report from Reuters that Trump said China and Europe manipulate their currencies as well as separate remarks lamenting the Federal Reserve’s interest-rate increases. Treasuries gave back some of Monday’s gains ahead of a meeting of central bankers later this week.
Equities drifted in Japan and the yen erased gains. Australia’s shares had the biggest decline in the region after the benchmark touched a 10 1/2 year high Monday. The Shanghai Composite Index continued Monday’s rebound when state-backed funds were seen buying stocks to stabilize the market. Earlier, the S&P 500 Index advanced for a third day to close within 15 points of a record. European futures traded lower.
Investors remain on tenterhooks as they await the outcome of talks between the world’s biggest economies on trade that have made their way back onto the agenda. Meanwhile, traders will be closely watching this week’s Jackson Hole symposium for clues on monetary policy, and to see whether central bankers can do anything to help bring back stability after the recent bout of emerging market-led volatility.
“Given the little progress made on the U.S.-China negotiations in the past six months, investors’ expectations are still low,” Tai Hui, JPMorgan Asset Management’s global market strategist, wrote in a note. “On-going negotiation is good news, and that’s what the market is riding on at this stage, but a sustainable agreement to end this tension still seems unlikely at this point.”
Elsewhere, the lira held onto declines over the past two days. Turkish markets are closed for most of this week, which may mean low trading volumes and sharper currency swings than usual. Emerging-market stocks and currencies rose.