Asian Markets, US Dollar Slide On Trump Political Worries
- Asian dealing screens turned red as markets worried about US political risk
- The US Dollar also headed lower
- Local data lost almost all power in the face of this overwhelming worry
How will Asia Pacific markets and currency majors fare into the year’s second half? Check out the DailyFX quarterly forecasts.
Asian stocks were all in the red Wednesday as political worries in the US continued to dominate trade.
The markets stumbled after the release of reports that dismissed FBI Director James Comey wrote a memo suggesting President Donald Trump had asked him to end a probe into former national security advisor Michael Flynn’s Russia ties. They followed earlier reports that Mr. Trump shared classified intelligence with Russian officials last week, when they came to the White House.
The markets' worry is that a mounting backdrop of potential scandal could derail the Administration’s economic and fiscal plans. In any case the Nikkei shed 0.5%, Australia’s ASX lost 0.3%. Chinese stocks and South Korea’s Kospi were also down.
The US Dollar slid generally, with US political turmoil and some stronger economic numbers out of the Eurozone taking a toll. The Dollar index is now at its lowest levels since early November and shed about 0.3% in the Asian session. The greenback also plumbed one-week lows against the Japanese Yen which caught a strong bid on its widely-perceived haven status.
Local economic numbers couldn’t compete with US politics for investor attention. New Zealand’s producer price rise decelerated a little in the first quarter, while Australian wage costs met expectations exactly. Consumer confidence in Australia also inched back.
Crude oil prices slid on Wednesday after data showed a rise in US inventories, raising concerns that even an extension to output cuts from traditional producers won’t dent the market’s now chronic oversupply.
But Spot gold hit two-week highs as stocks slipped and the Dollar fell. The oldest haven’s price hit $1.243.34/ ounce and has now gained for five consecutive days.
There’s plenty on the economic data for the rest of Wednesday. Investors will get a look at UK labor data, Eurozone consumer prices, US mortgage-application levels and, finally, oil inventories.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter:@DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.