Washington - The dollar
retreated against most major peers in Asian trade on Monday as investors
cashed in after a Federal Reserve-fuelled surge last week, while equities were
also lower due to China-US tensions.
The losses
tracked a decline on Wall Street after it emerged China had seized an unmanned
US sea survey probe from international waters in the South China Sea.
Thursday's
move raised geopolitical concerns as Donald Trump prepares to enter the White
House, having hit out at Beijing in recent weeks over several issues from
Taiwan to trade.
Last week
the dollar soared after the Fed raised borrowing costs and hinted at three more
increases next year -- surprising many who had priced in two -- as it prepares
for steeper price rises if Trump honours promises of tax cuts and big
infrastructure spending.
But in
afternoon trading Monday the greenback was down against the yen, euro and
pound, while some emerging market currencies -- which were hammered by a flight
of cash to the dollar - were also up.
However,
the Malaysian ringgit touched lows not seen since the 1998 Asian financial
crisis.
"I
can’t see the dollar index in a sustained rally - two rate hikes are priced
into fed funds futures, and a lot of expectation is built into Trump’s
policies," Janu Chan, a senior economist at St. George Bank in Sydney,
told Bloomberg News.
"On
the other side of the equation, the (European Central Bank) and (Bank of Japan)
are not likely to ramp up monetary stimulus any more. Profit-taking is most
likely behind current US dollar weakness but it’s possible it’s also due to geopolitical
concerns on the reports that China seized the US drone."
Not-so
super Mario
On stock
markets Japan's Nikkei closed in negative territory, the first loss after nine
successive gains.
The index
ended down 0.1 percent, with Nintendo diving more than seven percent as its new
game Super Mario Run received tepid reviews, a far cry from the global
phenomenon that was Pokemon Go earlier this year.
The firm's
shares fell more than four percent Friday.
"Investor
expectations were very strong," said Hideki Yasuda, an analyst at Ace
Research Institute. "There are a lot of people writing on the App Store
that Super Mario Run isn’t very fun. Perhaps expectations were too high."
Hong Kong
closed down 0.9 percent, Shanghai ended down 0.2 percent and Singapore lost 0.8
percent, while Seoul slipped 0.2 percent. There were also sharp losses in
Taipei, Jakarta and Manila.
However,
Sydney added 0.5 percent as the government stuck to its plan to return the
budget to surplus by 2021 and despite downgrading forecasts for economic
growth, with fears growing it could lose its AAA credit rating.
In early
European trade London was flat, Paris fell 0.3 percent and Frankfurt lost 0.2
percent.
AFP