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Asia: Stocks, dollar retreat ahead of Fed meeting
[HONG KONG] Asian markets slipped Wednesday, with Shanghai suffering another heavy loss owing to weak earnings, while the dollar edged down after more weak US data made an early interest rate rise unlikely.
The euro continued to hold its own, with investors hopeful that Greece will be able to hammer out a bailout reform deal with its creditors, helping it avert a default.
Hong Kong lost 0.38 per cent, Shanghai lost 1.40 per cent, Sydney fell 1.03 per cent and Seoul shed 0.15 per cent.
Tokyo was closed for a public holiday.
With few major catalysts, regional investors are turning their focus on the Fed's two-day meeting, which wraps up later in the day.
While the central bank will not announce any policy move, its statement will be pored over for any guidance over interest rates.
On Tuesday, the Conference Board reported its index of consumer confidence tumbled in March, instead of rising as expected. Consumers reported growing pessimism about current and short-term US economic conditions.
A series of disappointing indicators has fuelled speculation the bank will want to wait to increase rates, which have been pegged at zero since 2008. The Fed had signalled a possible hike as early as June, but analysts now expect it in September at the earliest.
Wednesday will also see the release of the government's first estimate on first-quarter economic growth, with analysts forecasting 1.0 per cent, down from a 2.2 per cent pace in the previous three months.
However, on Wall Street the Dow added 0.40 per cent and the S&P 500 rose 0.28 per cent but the Nasdaq eased 0.10 per cent The narrowing chances of a rate increase has weighed on the dollar, which fell to 118.88 yen in New York Tuesday from 119.10 yen earlier in the day in Tokyo. On Wednesday in Asia the greenback was at 118.82 yen.
The euro was at US$1.0974 and US$130.41 against US$1.0981 and 130.55 yen in US trade. However, it is sharply up from US$1.0880 and 129.54 yen in Tokyo Tuesday.
Despite talks between Greece's government and its creditors dragging on, there is hope for an agreement on the bailout that will unlock billions of euros, allowing Athens to avert a default and stay in the eurozone.
Investors cheered Prime Minister Alexis Tsipras' decision to reshuffle his negotiating team, while he has also expressed confidence in a compromise.
According to press reports Greece's hard-left, anti-austerity leadership could also be prepared to adopt some reforms previously rejected, including a reinforced tax collection system, taxing television adverts and ramping up levies on luxury goods.
Oil prices inched lower ahead of the release of the latest US supply report. US benchmark West Texas Intermediate for June delivery eased 22 cents to US$56.84 while Brent crude fell 13 cents to US$64.51.
Gold fetched US$1,211.49 against US$1,201.29 late Tuesday.