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US dollar pushes on in Asia after Wall St gains, equities cautious

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The dollar on Wednesday built on most of its New York gains that came after a strong US consumer confidence survey reinforced the view of a strong economy, though Asian markets were less certain following the previous day's rebound.

[HONG KONG] The dollar on Wednesday built on most of its New York gains that came after a strong US consumer confidence survey reinforced the view of a strong economy, though Asian markets were less certain following the previous day's rebound.

After more than a week of negativity, US traders finally saw a broad advance across equities and in the greenback on the back of figures showing American shoppers were growing increasingly upbeat.

News that the consumer confidence index had hit a 16-year high helped sooth worries that Donald Trump's economy-boosting agenda could have been thrown off-rail by the collapse of his healthcare bill owing to splits in his Republican party.

Friday's debacle over repealing Obamacare hammered world markets on speculation the tycoon would not be able to ram through promised tax cuts and infrastructure spending.

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But Greg McKenna, chief market strategist at AxiTrader, noted the US reading "goes a long way to support the notion that the US economy is doing well".

He added: "It's not just about the hope of change via president Trump's policies. It's about actual improvement in dataflow and a real sense that the globe is reflating."

The Dow on Wall Street ended in the black for the first time after an eight-day losing streak, with a bounce in oil prices also providing support. The S&P 500 and Nasdaq also posted healthy gains.

CRUDE PICKS UP

The dollar, which has been hammered since the Federal Reserve this month signalled a slower pace of interest rate hikes than expected, also moved higher.

It was at 111.30 yen, well up from 111.08 yen in New York and 110.60 yen in Tokyo Tuesday.

The euro and pound were also well down from a day ago, hit by British Prime Minister Theresa May's official signal to leave the European Union. Sterling was down more than 1.5 US cents and the single currency was 50 cents lower.

"Further underpinning the Greenback were comments from House Speaker (Paul) Ryan suggesting that the Republican party were unified when it comes to tax cuts," said Stephen Innes, senior trader at OANDA.

On equities markets Hong Kong edged up 0.4 per cent, Sydney gained 0.8 per cent and Seoul was flat, while Shanghai fell 0.2 per cent and Tokyo finished the morning session marginally lower.

Energy firms were among the big winners as an outage in Libya wiped 250,000 barrels a day out of the global market, easing worries about a supply glut, while a US stockpiles reading came in on target.

Both main crude contracts rose more than one per cent Tuesday and extended the gains in Asia.

In Hong Kong, PetroChina climbed 0.4 per cent and CNOOC put on 0.2 per cent, while Tokyo-listed Inpex was up and Woodside Petroleum in Sydney jumped 1.4 per cent.

AFP

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