Asia stocks rebound, dollar hits 12-year euro high

GMT 03:52 2015 Thursday ,12 March

Arab Today, arab today Asia stocks rebound, dollar hits 12-year euro high

Sydney shares
Hong Kong - AFP

The dollar edged closer towards parity with the euro Thursday after the European Central Bank kicked off its stimulus programme this week, while Asian equity markets recovered slightly from a recent sell-off.
Sydney shares were given a lift by data showing Australia's unemployment rate had eased slightly, while South Korea became the latest country to cut interest rates as it struggles to fight off deflation.
Tokyo rose 0.88 percent, Sydney added 0.88 percent while Seoul gained 0.22 percent and Hong Kong put on 0.11 percent.
Shanghai advanced 0.73 percent.
Traders brushed off more losses on Wall Street, where the three main indexes have given up all their 2015 gains on expectations the Federal Reserve will raise interest rates as early as the summer.
The Dow fell 0.16 percent, the S&P 500 shed 0.19 percent and the Nasdaq eased 0.20 percent.
However, bets on the rate increase, mixed with the ECB's new asset-purchase scheme, known as quantitative easing (QE), has sent the dollar soaring to 12-year highs against the euro.
On Thursday morning the single currency fetched $1.0542, down from $1.0548 Wednesday in US trade and its weakest since March 2003.
With the ECB just starting on QE and the Fed due to lift rates, analysts are tipping dollar-euro parity possibly by next year, which would be the first time since 2002.
The euro also dipped to 128.07 yen from 128.10 yen, with investors nervously watching strained talks between Greece and its European creditors over reforming its bailout obligations.
The greenback was meanwhile at 121.46 yen on Thursday in Tokyo against 121.44 yen in New York.
“We've never seen stimulus created like this before and how you bleed that out is creating a lot of uncertainty as to what’s going to happen” Michael Cuggino, president of Pacific Heights Asset Management LLC in San Francisco, told Bloomberg TV.
“There's such a divergence between what's going on in the rest of the world with central banks cutting rates and the US likely raising them.”
South Korea's central bank announced a surprise cut in interest rates to a record low 1.75 percent Thursday in a bid to avert a painful deflationary spiral and kick-start the struggling economy.
The Bank of Korea is the latest country -- including China, India and Australia -- to lower rates in the face of falling prices and weak economic growth.
Oil prices were mixed after a key report showed US crude reserves had swollen to another record high.
US benchmark West Texas Intermediate fell three cents to $48.14 while Brent crude rose 11 cents to $57.65.
Gold fetched $1,152.38 against $1,157.55 late Wednesday.


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