Asian stocks resume ascent on earnings hopes, euro gets lift from European Central Bank

DailyFX US AM Digest US Dollar at Three Year Low versus the Euro

Asian stocks resume ascent on earnings hopes, euro gets lift from European Central Bank

Data showing robust US retail sales drove investor optimism about economic growth, also boosting sentiment in the stock market.

The euro surged more than half of a percent against the dollar on the comments, with investors taking the relatively hawkish statement as a further signal that the European Central Bank will wind down its 2.55 trillion euro bond purchase scheme this year if growth continues to roar ahead.

Germany's DAX 30 index was up 0.1% at 13,215.12, and France's CAC 40 picked up 0.1% at 5,493.95.

The dollar stayed in the doldrums after US wholesale prices dipped in December from November, reinforcing investors' expectations that inflation will remain low.

The single currency had already rallied on Thursday, after ECB policymakers said in minutes of the bank's December meeting that they could revisit their communication stance in early 2018. Japan's Nikkei 225 and Topix indices traded lower by 0.2% and 0.6% respectively, but Hong Kong's Hang Seng index climbed 0.8%, trading at its highest since late 2007.

Trade has ranged from $1,322.85-1,329.15 so far today.

The dollar index was down by 0.05% to 91.81 as of 11.57am Shanghai time.

DailyFX US AM Digest US Dollar at Three Year Low versus the Euro
Asian stocks resume ascent on earnings hopes, euro gets lift from European Central Bank

The kiwi gained to 4.7080 Chinese yuan from 4.6838 yuan on Thursday after the Chinese government quashed speculation it was considering cutting its purchases of US Treasuries.

When the euro was created some 15 years ago, there was speculation that the new currency might come to challenge the dominance of the USA dollar as the global reserve currency of choice. Benchmark U.S. crude slipped 37 cents to $63.55 a barrel in electronic trading on the New York Mercantile Exchange.

The BOJ kicked things off Tuesday by cutting purchases of long-dated Japanese government bonds, spurring bets it may also tweak its yield-curve control policy.

German bond yields hit fresh five-month highs on Friday and the euro hit a three-year high as coalition progress in Germany added to a bond sell-off first triggered by the possibility of a European Central Bank rethink on policy messaging.

Among other precious metals, silver rose by 0.24 percent to record $16.98 an ounce after hitting a two-week low of $16.86 on Wednesday. Despite this pullback, both WTI and Brent are still hovering near multi-year highs, amid declining United States crude inventories, the extremely cold weather observed in the USA recently, and the OPEC-led supply curbs. In precious metals, gold edged up 0.4% without any major news behind the move, likely boosted by the softer U.S. dollar. The all-important 10-year yield hit its highest level since March on Tuesday.

Brent crude prices hit $70 a barrel on signs of tightening crude stocks but settled off that level on Thursday, while a jump in energy shares helped lift USA stocks.

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