Dollar Remains Weak as U.S. Politics Steals Show: Markets Wrap

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Stocks in Asia are set to pare a back-to-back weekly advance while the dollar returned to its lowest in nearly a year as investors assess an investigation into the U.S. president amid concern the economic recovery is faltering.

The Bloomberg Dollar Index slid and Treasuries climbed following reports that U.S. special counsel Robert Mueller is expanding his investigation of President Donald Trump to examine his financial dealings. The euro held gains after European Central Bank President Mario Draghi signaled the bank would discuss language on bond purchases in the autumn.

Global equities have continued eking out fresh all-time highs this week as measures of volatility sank to fresh lows and investment-grade bond spreads tightened amid corporate results that have reinforced faith in earnings and the economy. While it’s early in the U.S. profits season, some 83 percent of companies so far have topped estimates on the bottom line. Asian shares are up almost five percent in the past two weeks, with markets in Japan and Hong Kong back up to two-year highs.

Politics in Washington shot to the forefront of investor attention after central banks dominated proceedings earlier in the week. Transactions being looked at include Russian purchases of apartments in Trump buildings. The news came less than a day after Trump told the New York Times that any digging into his finances would cross a red line.

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Here are the main moves in markets:

  • The Bloomberg Dollar Spot Index lost 0.3 percent, closing at the lowest since August. 
  • The yen traded at 111.85 per dollar, a second week of gains for Japan’s currency. 
  • Futures on the S&P 500 Index were little changed after the underlying gauge closed flat on Thursday.
  • The euro held at $1.1634 after surging 1 percent on Thursday to a 23-month high. No decision has been made on timing or form of any tapering, Draghi said, adding that the Governing Council kept the timeline for discussions and tapering open.
  • WTI crude was little changed in early Friday trading at $46.92 a barrel after losing 0.8 percent on Thursday.
  • Futures on Japan’s Nikkei 225 slid 0.1 percent in Singapore. Contracts on Australia’s S&P/ASX 200 Index lost 0.2 percent and Hang Seng futures were flat.

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