ASIAN STOCKS TALKING POINTS:

  • Major indexes were broadly higher
  • The New Zealand Dollar got a kicking from lowered central bank growth and inflation forecasts
  • The US Dollar is still riding high

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Asian shares moved broadly higher Thursday, tracking gains on Wall Street which came in turn as higher oil prices boosted energy names after Donald Trump’s withdrawal of the US from a nuclear deal with Iran.

The Nikkei 225 added 0.39% with similar modest gains seen across major Asian stock markets from Australia to China.

Oil prices continued to forge up to multi-year highs as the markets attempted to adjust to looming US sanctions against major producer Iran, which will also threaten third countries which do business there.

The US Dollar remained the king of foreign exchanged with interest rate differentials driving it higher against the Euro and Sterling. The New Zealand Dollar was clobbered by a Reserve Bank of New Zealand interest rate decision. Rates were left alone at record lows as expected but forecasts were growth and inflation were nudged lower raising the strong prospect that rates will not rise for some time.

New RBNZ Governor Adrian Orr sounded a more dovish tone too.

Japanese trade data came in quite strongly but the Summary of Opinions from the Bank of Japan’s last monetary policy meeting left investors in little doubt that current, ultra-loose monetary policy settings are staying put.

The Malaysian Ringgit slipped in the forward market Thursday following the shock re-election of 92-year-old former Prime Minister Mahthir Mohamad. Stock markets there were closed.

Financial markets have so far made only a muted response to news of skirmishes between Israel and Syria.

Gold prices were steady with a firmer US Dollar weighing on them but with the markets’ various other worries supporting.

Still to come Thursday is the Bank of England’s monetary policy decision –with no change now expected. US consumer prices are also due, as are jobless claim numbers.

GBP/USD has fallen sharply this month have markets reassess the chances of another upward move in UK interest rates.

British Pound Vs US Dollar, Daily Chart

It has found support at January’s lows but another dovish performance from Governor Mark Carney on Thursday could see it head lower once more.

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--- Written by David Cottle, DailyFX Research

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