SHANGHAI , Aug 10 2018 : Asian stock markets fell today amid heightened global trade tensions, while currency markets were whipsawed by a searing selloff in Russia’s rouble after the United States slapped new sanctions, and as economic worries sent the Turkish lira tumbling.
Washington said it would impose fresh sanctions because it had determined that Moscow had used a nerve agent against a former Russian agent and his daughter in Britain, which the Kremlin denies.
The rouble slid to its lowest level since late 2016 yesterday, hitting 66.7099 roubles to the dollar. At 0021 GMT yesterday, it was changing hands at 66.5245 to the dollar.
Turkey’s lira fell to record lows against the dollar yesterday, with a meeting between a Turkish delegation and U.S. officials in Washington yielding no apparent solution to a diplomatic rift over the detention in Turkey of a U.S. pastor.
Deepening investor concerns about Turkey’s authoritarian trajectory under President Tayyip Erdogan and the economic fallout have also weighed on the currency.
Turkish Finance Minister Berat Albayrak is set to unveil the latest plan for Turkey’s economy today.
The turmoil in emerging currencies and ongoing global trade tensions helped to support the dollar yesterday, but it was little changed in early Asian trading.
The dollar was flat against the yen and euro, while the dollar index, which tracks the greenback against a basket of six major rivals was 0.1 percent higher at 95.613.
U.S. Treasury yields also fell on the risk-off mood. The yield on benchmark 10-year Treasury notes was at 2.9276 percent compared with its U.S. close of 2.935 percent yesterday.
In equity markets, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3 percent.
Wall Street provided little direction for markets in Asia today, with the Dow Jones Industrial Average falling 0.29 percent, the S&P 500 ending 0.14 percent lower and the Nasdaq Composite adding 0.04 percent.
Attention in Australia today will focus on updated economic forecasts from the Reserve Bank of Australia (RBA) in its statement on monetary policy.
RBA governor Philip Lowe said on Wednesday that the “best course” of action for the central bank would be to keep cash rates at record lows despite expectations that economic growth will average 3 percent this year and next.
“We do not expect any material change in the narrative or to forecasts given that the economy has evolved broadly as the RBA expected,” ANZ analysts said in a note today.
Australian shares were flat
In commodities, U.S. crude dipped 0.2 percent at $66.67 a barrel, while Brent crude was 0.3 percent lower at $71.88 per barrel.
Gold ticked higher, with spot gold trading up 0.1 percent at $1212.96 per ounce. – Reuters