The dollar was up on Friday morning in Asia, set to post a weekly gain. Investors are now beginning to assess the risk that U.S. inflation will rise faster and prompt central bank interest rate hikes sooner than expected.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.02% to 90.755 by 11:23 PM ET (3:23 AM GMT).
The USD/JPY pair edged up 0.14% to 109.61.
The AUD/USD pair inched down 0.06% to 0.7724 and the NZD/USD pair inched up 0.04% to 0.7174.
The USD/CNY pair inched down 0.08% to 6.4457 and the GBP/USD pair inched down 0.07% to 1.4040.
Investors digested even more economic data after inflation data, including the core Consumer Price Index, was higher than expected.
European stock markets are seen opening higher Friday, helped by the rebound on Wall Street as Federal Reserve officials managed to ease investor jitters over growing inflationary pressures.
At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.1% higher, CAC 40 futures in France climbed 0.6% and the FTSE 100 futures contract in the U.K. rose 0.4%.
All three major U.S. stock indexes notched solid gains on Thursday, bouncing back from three straight days of selling on worries that rising inflation will push the Federal Reserve into tapering its ultra easy monetary policies earlier than it is currently guiding.
The blue-chip Dow Jones Industrial Average closed 1.3%, or over 400 points, higher, the S&P 500 gained 1.2%, its biggest percentage gain in over a month, while the Nasdaq Composite picked up the rear, rising 0.7%.
Japanese shares led a rebound in Asian markets on Friday, building on the lead from investors on Wall Street snapping up stocks that would benefit most from an economic revival.
The rally interrupted a three-day rout for stocks globally, as market jitters over accelerating U.S. inflation were calmed by Federal Reserve officials reiterating that price pressures from the reopening of the economy would prove transitory.
Tokyo’s Nikkei jumped 2.2%, while MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.8%,
Chinese blue chips rose 1.7%, while Australia’s benchmark rallied 0.8%.
“U.S. equities were up, so there is a bit of relief in Asia,” said Frank Benzimra, head of Asia equity strategy at Societe Generale (OTC:SCGLY) in Hong Kong.
However, “we certainly are going to have some volatility near-term,” as markets react to CPI and other economic indicators for clues on the path for U.S. monetary policy.
The Fed may open the discussion on tapering its asset purchases as soon as the policy meeting next month, he said.
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