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Asian shares edge up, dollar pinned near two-year low versus euro
October 24, 2013 / 1:04 AM / 4 years ago

Asian shares edge up, dollar pinned near two-year low versus euro

TOKYO (Reuters) - Asian shares edged up on Friday and the dollar was hemmed in near a two-year low against the euro on expectations the U.S. Federal Reserve would maintain its massive monetary stimulus into 2014.

A visitor walks past logos at the Tokyo Stock Exchange in Tokyo June 13, 2013. REUTERS/Toru Hanai

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.2 percent. The index fell 0.1 percent on Thursday as rising Chinese money-market rates countered signs of a pick-up in manufacturing in the world’s second-largest economy.

In Tokyo, Nikkei futures fell 0.4 percent, signaling a softer opening for the benchmark .N225.

U.S. S&P E-mini futures were flat in early trade after the S&P 500 index .SPX had advanced 0.3 percent on solid earnings and expectations that monetary stimulus will be in place for the foreseeable future after weak data. .N

U.S. manufacturing output fell for the first time in four years and the number of new claims for unemployment benefits fell less than expected last week.

Traders work on the floor of the New York Stock Exchange August 28, 2013. REUTERS/Brendan McDermid

The euro was steady at $1.3798, not far from a two-year high of $1.3826 touched on Thursday and shrugging off data showing the pace of growth in euro zone business unexpectedly eased this month.

“The dollar will not rally without Fed tapering expectations rising again, but we would not chase EUR/USD higher here, as rate compression suggests the pair is unlikely to break much higher,” Societe Generale analysts wrote in a note, saying they favoured Scandinavian and Antipodean currencies into year-end.

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“Fed tapering expectations being pushed out into 2014 and further ECB easing early next year suggest a favourable policy environment for the FX carry trade. Throw in lower volatility and seasonality effects, and one has the perfect cocktail for the carry trade.”

The Australian dollar held steady at $0.9618, about one cent below a 4-1/2 month high of $0.9709 on Wednesday.

Against the yen, the dollar stood at 97.37 yen, a stone’s throw from a two-week low of 97.15 yen hit on Wednesday.

Gold paused for breath after climbing 1.1 percent on Thursday, while U.S. crude prices added 0.1 percent to about $97.2 a barrel, moving away from a 3-1/2 month low of $95.95 touched in the previous session.

Editing by John Mair

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