Wellington/ Kuala Lumpur: The dollar extended gains at the highest in more than a decade as a stronger case for hiking US interest rates weighed on bonds and gold. Japanese stocks climbed, while emerging-market assets dropped.
The greenback’s strength was felt across Asia, with the Philippine peso dropping to an eight-year low and the yen near the weakest level in more than seven months. Japan’s Topix index climbed for a 10th straight session as investors returned from a holiday, while South Korea’s equity index lost 0.8 percent. Ten-year Australian and New Zealand government debt yields rose for a second day, as gold traded near a nine-month low. Copper and zinc surged.
The selloff in bonds and emerging markets sparked by Donald Trump’s unexpected election as US president has resumed, after better-than-estimated data on durable goods orders and manufacturing helped keep bets on a Federal Reserve rate hike next month at 100 %. Central bank officials saw a stronger case for policy tightening amid solidity in the labour market, with some saying a hike should take place in December, according to minutes of the November gathering. US equity benchmarks extended records last session before the Thanksgiving holiday.
“The dollar has been really strong in anticipation of Yellen’s move next month and that strength in the US dollar is ultimately going to mean that emerging market assets would be seen as disadvantaged,” Nicholas Teo, a strategist at KGI Fraser Securities in Singapore, said by phone. Bloomberg