Asia markets: Euro in focus

The ECB announced Thursday it was holding interest rates and asset purchases steady. The central bank’s president, Mario Draghi, said at a conference later in the day that discussions about potential changes to the central bank’s quantitative easing (QE) program should take place in the fall. No fixed time frame was set for when those discussions would begin.

The euro, which initially edged down after the ECB’s decision, spiked to trade at two-year highson the back of of Draghi’s comments to trade above the $1.16 level. The common currency traded at $1.1626 at 9:39 a.m. HK/SIN.

Meanwhile, more political headlines out of the U.S. overnight put pressure on the dollar. Special Counsel Robert Mueller was looking into transactions involving President Donald Trump and people linked to him, Bloomberg reported.

The dollar index stood at 94.293 at 9:39 a.m. HK/SIN compared to a high of 95.167 seen earlier in the overnight session. The greenback also softened against Japan’s currency to fetch 111.98 yen compared to levels around the 112 handle seen earlier this week.

The dollar had taken a tumble on Tuesday on headlines related to stalled health care reforms in the U.S.

“This revelation is huge as just last week, President Trump said that expanding the investigation beyond Russia would be out of bounds. So with Mueller broadening the inquisition into Trump’s business dealings, U.S. political risk could move to whole new levels as this foxtrot plays out,” OANDA senior trader Stephen Innes said in a note.

In individual stocks, shares of LG Chem were up 1.07 percent, after rising more than 2 percent earlier in the session, following Korean media reports that the company had been chosen as the exclusive battery supplier for the Apple iPhone 9. This is reportedly the first time Apple has diverged from its multi-vendor policy and chosen a single supplier for an iPhone component.

Meanwhile, Hong Kong property stocks were mixed. Shares of Sunac China Holdings and Guangzhou R&F were higher after soaring in the previous session. Sunac was up 1.63 percent and Guangzhou R&F climbed 0.72 percent, but Wanda Hotel Development declined 1.22 percent.

Nomura increased its target price for Sunac to 25.50 Hong Kong dollars ($3.27) from 19.64 Hong Kong dollars ($2.51) after changes were made in an asset acquisition deal involving Dalian Wanda. Nomura retained its “buy” call on Sunac shares.

“We are more positive on the new deal than the previous one as Sunac will not buy hotels but focus on its core property development business,” Nomura analysts Elly Chen and Chloe Liu said in the July 20 note. While there was likely to be headwinds facing the company in the short term, property demand in the medium term was likely to be sustainable, they added.

In currencies, the Australian dollar last traded against the dollar at $0.7925. The Aussie dollar strengthened immediately after an employment report released Thursday, but later pared back those gains. Currency markets are expected to keep an eye on a speech by Reserve Bank of Australia Deputy Governor Guy Debelle later in the day.

On the energy front, oil prices traded slightly higher. Brent crude rose 0.02 percent to trade at $49.31 a barrel and U.S. West Texas Intermediate crude advanced 0.08 percent to trade at $46.95.

On Wall Street, major indexes closed mixed on Thursday after hitting record levels earlier in the trading session.

The Dow Jones industrial average edged down 0.13 percent, or 28.97 points, to close at 21,611.8 and the S&P 500 closed lower by 0.02 percent, or 0.38 points, at 2,473.45. The Nasdaq bucked the trend to close above the flat line. The tech-heavy index rose 0.08 percent, or 4.96 points, to finish at 6,390.

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