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Dollar Set for Weekly Loss While Gold Holds Gains: Market

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The dollar headed for a weekly loss and gold traded at the highest price in almost two months as investors continued to assess whether market moves since the U.S. election have gone too far. Japanese stocks rose as the yen weakened and Chinese shares declined after data on exports.

The U.S. currency rose after touching the lowest point in almost a month on Thursday, as Federal Reserve Chair Janet Yellen reiterated that the U.S. economy is doing well. The yen gave up early gains, trimming its strongest week since July and sending shares in Tokyo higher. The Shanghai Composite Index headed for its lowest level since December as data showed China exports remain subdued. Gold was little changed after a four-day rally.

In a week characterized by a reversal in many of the market moves seen since Donald Trump’s election, Friday will see the release of a report on U.S. holiday-season retail sales as well as earnings from Bank of America Corp., JPMorgan Chase & Co., and Wells Fargo & Co. Since Trump’s victory, the dollar and global equities have rallied, while bonds sold off amid expectations for improved U.S. growth. Investors unwound some of those wagers Thursday after the president-elect’s first press conference since the November victory.

The lack of details from Trump “was probably more concerning for markets as it highlights how markets have run ahead of themselves.,” Savanth Sebastian, Sydney-based analyst at Commonwealth Bank of Australia, said by phone. He added that while the domestic Chinese economy still seems to be holding up reasonably well, the data “highlights the risks to exports with the Trump administration going forward and protectionist-style policies.”

The U.S. economy is doing well, with inflation now pretty close to the Fed’s 2 percent target, Yellen said at a town hall meeting. The central bank should begin discussing how to shrink its bloated balance sheet this year, according to three regional Fed presidents who stepped up pressure for a debate on when to unwind emergency-era measures that the Fed preferred to postpone.

Stocks

The MSCI Asia Pacific Index lost 0.1 percent as of 3:57 p.m. in Tokyo, with more than 500 stocks advancing and about 400 declining.

Japan’s Topix index rose 0.6 percent, paring a weekly decline. The Shanghai Composite Index slid 0.3 percent in a fourth day of losses, the longest run since October. Hong Kong’s Hang Seng added 0.4 percent. Overseas shipments fell 6.1 percent from a year earlier in December, China’s customs administration said.

Australia’s S&P/ASX 200 declined 0.8 percent and New Zealand’s S&P/NZX 50 slid 0.2 percent. South Korea’s Kospi index retreated 0.5 percent as the central bank left its key interest rate at a record low. Futures on the S&P 500 Index increased 0.1 percent after the gauge slid 0.2 percent on Thursday.

Emerging-market equities were little changed after rallying to the highest level since the U.S. election on Thursday, as gains in oil and metals lifted commodities producers.

Currencies

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, was little changed after falling 0.5 percent on Thursday. The gauge is down 0.6 percent for the week.

The yen held losses at 114.77 per dollar. The currency is on course for a 1.7 percent gain this week, the best performance since the end of July.

The offshore yuan was little changed after a two-day gain. China has asked some banks to stop processing cross-border yuan payments until they balance inflows and outflows, people familiar with the matter said, as authorities step up a campaign to curb a record amount of money leaving the nation in the local currency.

Turkey’s lira slipped 0.5 percent after surging 2.8 percent against the dollar on Thursday. The central bank is implementing measures to force banks to borrow at a higher rate, according to a person with direct knowledge of the matter.

Bonds

The benchmark 10-year Treasury yield rose one basis point to 2.37 percent, after touching the lowest level since Nov. 30 on Thursday.

The yield on Australia’s 10-year government notes added two basis points to 2.68 percent.

Commodities

Oil futures rose 0.1 percent to $53.08 a barrel. Crude jumped 1.5 percent on Thursday, after Saudi Arabia said it cut production even more than required by an OPEC deal.

Gold traded at $1,195.63 an ounce after briefly rising above $1,200 for the first time since November on Thursday.

Source: Bloomberg