Dollar struggles, most stocks up in Asia after US data

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Dollar weakens on US service sector slowdown

HONG KONG, Aug 1, (APP/AFP) – Fading expectations for a US interest rate rise this year hit the dollar and boosted stocks in Asia on Monday, although Shanghai equities took a hammering from weak manufacturing data.

Friday’s report showing the world’s number one economy expanded just 1.2 percent in April-June poured water on speculation the Federal Reserve will lift interest rates before the year’s end.

It also came hours after the Bank of Japan disappointed investors by deciding against ramping up its stimulus programme.

The two events hammered the greenback, which ended Friday just above the 102 yen mark, well down from the levels around 106 yen touched the day before.

In early Asian trade, the dollar edged up slightly against the
Japanese currency to 102.60, but lost ground against the South Korean won, Indonesia’s rupiah and Malaysian ringgit, which jumped 0.8 percent.

Forex traders’ attention will now turn to Tuesday’s speech from Japanese Prime Minister Shinzo Abe, in which he is expected to outline details of the government’s 28 trillion yen stimulus flagged last week.

“The very low amount of stimulus from the BoJ does leave the market clearly expecting significant move from Prime Minister Abe in his announcement,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“Overall, we remain concerned about the impact of tighter US policy, but that can easily be overwritten by a significant stimulus package from Japan tomorrow.”

– Key figures around 0230 GMT –
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Tokyo – Nikkei 225: UP 0.5 percent at 16,650.49 (break)
Hong Kong – Hang Seng: UP 1.2 percent at 22,157.53
Shanghai – Composite: DOWN 1.3 percent at 2942.24
Euro/dollar: DOWN at $1.1173 from $1.1177 late Friday
Pound/dollar: UP at $1.3244 from $1.3223
Dollar/yen: UP at 102.60 yen from 102.08 yen
New York – DOW: DOWN 0.1 percent at 18,432.24 (close)
London – FTSE 100: UP 0.1 percent at 6,724.43 (close)