Dollar, Asia markets rally on Trump tax plan promise

0

HONG KONG: The dollar extended a rally on Friday after Donald Trump said he would release details of a “phenomenal” tax-cut plan, sending Asian stock markets soaring on hopes it will ramp up the US economy.

Japan’s Nikkei index led the regional advance, piling on more than two percent, as the greenback pummelled the yen following weeks of losses.

World markets surged in the two months after Trump’s November election, buoyed by his promises to slash taxes, hike infrastructure spending and cut red tape to fan economic growth.

But the three weeks since he took office have been consumed with a series of controversial measures and outbursts on trade that had left dealers worried his domestic agenda had been put on the backburner.


The news sent a rocket through Wall Street, where all three main indexes ended at record highs, and the dollar powered higher.

On Friday, those gains continued with the greenback buying 113.75 yen, compared with 112.67 yen in New York and 112.00 yen in Asia earlier Thursday.

It also rose against higher-yielding Asia-Pacific currencies, with South Korea’s won losing 0.5 percent, Australia’s dollar down 0.2 percent and the Indonesian rupiah losing 0.1 percent. Malaysia’s ringgit, the Singapore dollar and the New Zealand dollar were also well down.

On equity markets the Nikkei ended the morning session 2.4 percent higher, while Hong Kong added 0.6 percent and Shanghai gained 0.1 percent ahead of the release of Chinese trade data later in the day.
Sydney rallied 0.8 percent, Seoul 0.6 percent and Singapore put on 0.7 percent.

Taipei, Manila and Jakarta were also higher.

However, while the mood is upbeat, investors are keeping a wary eye on events in Europe, where a fresh debt crisis is brewing in Greece after the International Monetary Fund warned the targets prescribed for it to qualify for European bailout cash are unrealistic.

Germany reaffirmed its opposition to cutting Athens’ debt despite the IMF asking its creditors for some kind of relief. Worries over the issue have sent Greek 10-year bond yields towards eight percent, having sat below 6.5 percent in November.

Share.
.
Loading...

Please follow our commenting guidelines.

Comments are closed.