Reuters: US Dollar Report: GLOBAL MARKETS-Asian shares up on "fiscal cliff" hopes

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GLOBAL MARKETS-Asian shares up on "fiscal cliff" hopes Dec 21st 2012, 00:29 Thu Dec 20, 2012 7:29pm EST * MSCI Asia ex-Japan inches up, Nikkei opens up 1.1 pct * Yen stays near multi-month lows vs dollar, euro * Gold stabilises after plunge By Chikako Mogi TOKYO, Dec 21 (Reuters) - Asian shares edged higher on Friday, encouraged by a rise in global shares overnight, as investors clung to their hopes that U.S. legislators will strike a deal before the year-end deadline to avoid a fiscal crisis. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 percent, making small gains for the fourth day in a row. Australian shares rose 0.4 percent, extending to a fourth day the gains that have taken them to 17-month highs after U.S. stocks rose on signs of modest progress in the U.S budget negotiations. Wall Street rebounded from early losses, after Republican House of Representatives Speaker John Boehner said he would keep working on a solution to the "fiscal cliff" while also slamming President Barack Obama's approach to the budget talks. "Every day, positive news or negative news rotates around the U.S. budget talks, affecting shares. But hope is still alive that U.S. politicians will eventually agree on a fiscal deal," said Kang Hyun-ki, an analyst at IM Investment & Securities. Seoul shares opened 0.3 percent higher. The yen held near multi-month lows against the dollar and euro, on track to be the worst-performing major currency of 2012. The dollar was at 84.40 yen, near a 20-month high of 84.62 yen hit on Wednesday. The euro was at 111.78 yen , also near a 16-month high of 112.59 yen reached on Wednesday. So far this year, the dollar has risen some 9 percent on the yen, while the euro was up more than 12 percent. The yen was pressured as the Bank of Japan further eased monetary policy on Thursday and was expected to pursue more drastic measures next year. The incoming prime minister, Shinzo Abe, has called for bolder action by the central bank to help bring Japan out of decades-long deflation. A weaker yen has supported the Nikkei, with the benchmark Japanese stock average opening up 1.1 percent. "Although the market is overheated, more buying is expected as the yen is seen staying low even after the BOJ's steps are priced into the market," said Hiroichi Nishi, general manager at SMBC Nikko Securities. Recent data has shown that the world's largest economy remained on a recovery track, helping to underpin the U.S. currency. The U.S. economy grew at a faster-than-expected 3.1 percent annual rate in the third quarter, while other data on Thursday showed factory activity in the mid-Atlantic region picked up this month and home resales in November were the best in three years. The euro eased 0.1 percent to $1.3226, off a 8-1/2-month high of $1.33085 touched on Wednesday. The improving U.S. economy and a stabilising Europe eroded the appeal of gold as a crisis hedge, triggering a technical sell-off and heavy liquidation by hedge funds before the year-end. Spot gold prices plunged more than 1 percent on Thursday to a low of $1,635.09 an ounce, the weakest since Aug. 22, sending the market below its 200-day moving average. Gold steadied around $1,647.11 on Friday. The plunge in gold sent silver diving 4 percent and platinum group metals down around 2 percent. U.S. crude was down 0.1 percent to $90 a barrel. Link this Share this Digg this Email Reprints

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