Asian markets rose for a second day on Thursday following gains on Wall Street, but with trading thin leading into the New Year break there was little to drive prices at the end of a stellar year for global equities.
But analysts warned the dollar could face pressure despite expectations for more Federal Reserve interest rate hikes over the next 12 months.
“The dollar bears are getting their last licks in for 2017 perhaps foreshadowing of things to come in 2018,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
“The bears took their cue from the Conference Board consumer confidence index, which fell to its lowest level since November 2016, indicating that consumer spending may have peaked after this years blowout holiday season for shoppers.
“And retail sales data could struggle in the face of even the most modest of US rate hikes in 2018.”
The greenback edged down against the yen, pound and euro, while it was also weaker against most high-yielding currencies including the Australian dollar, South African rand and South Korean won.
In share trading Hong Kong rose 0.6 percent, Shanghai added 0.2 percent and Sydney put on 0.1 percent, while Tokyo finished the morning 0.2 percent higher.
Seoul was 0.6 percent higher, with Hyundai Heavy Industries — the world’s largest shipbuilder by sales — up almost four percent a day but making only a small dent in Wednesday’s losses of 29 percent that came after news the company will issue new stocks in a bid to shore up its ailing finances.
Energy firms across the region were higher thanks to a pick-up in oil prices, which are sitting around two-year highs.
And OANDA’s Innes said there could be more rises in crude caused by supply cuts by Russia and OPEC, while adding that “markets will continue to drift towards bullish headlines, and with geopolitical risk no less sure ahead of Libyan elections next year we should expect more regional chaos and disorder to underpin prices”.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 0.2 percent at 22,945.67 (break)
Hong Kong – Hang Seng: UP 0.6 percent at 29,773.20
Shanghai – Composite: UP 0.2 percent at 3,283.34
Euro/dollar: UP at $1.1902 from $1.1894 at 2140 GMT
Pound/dollar: UP at $1.3410 from $1.3401
Dollar/yen: DOWN at 113.19 from 113.29
Oil – West Texas Intermediate: UP two cents at $59.66 per barrel
Oil – Brent North Sea: DOWN one cent at $66.43 per barrel
New York – DOW: UP 0.1 percent at 24,774.30 (close)
