Traders await Powell hearing; Brexit doubts grip pound
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[November 28, 2017]
By Georgina Prodhan
LONDON (Reuters) - The dollar was stuck
near a two-month low on Tuesday as traders waited for the confirmation
hearing of new Federal Reserve chair Jerome Powell, while the pound
slipped from a two-month high as Brexit-related doubts began to re-exert
European shares rose, supported by consumer staples as Anglo-Dutch
Unilever <ULVR.L> said it favored a single base, and by oil and gas
stocks after Royal Dutch Shell <RDSa.L> canceled an austerity dividend.
Powell, seen as a continuity choice at the Fed, defended the U.S.
central bank's use of broad crisis-fighting powers and signaled a
willingness to move aggressively against a downturn, in remarks prepared
ahead of the 1500 GMT hearing.
"The market sees Powell as mister continuity ... but I think there is
some risk around the event," said Saxo Bank's chief FX strategist John
Hardy. "There are lots of hypothetical questions they could ask him ...
and if he appears on the hawkish side there could be some volatility."
The dollar rose 0.2 percent against a basket of six major currencies <.DXY>.
Hopes for U.S. tax cuts also helped the greenback as Donald Trump
tweeted again that the plans were "coming along very well".
The pound dipped 0.2 percent to $1.3291 <GBP=> despite the Bank of
England's saying UK banks could handle a bad Brexit, and the apparent
aversion of an Irish political crisis that had threatened to derail a
The euro slipped 0.1 percent, while top European stocks rose 0.4
Euro zone government bond yields slid, with 10-year German yields -- the
regional benchmark -- at 0.338.
U.S. stock index futures pointed to a higher open, with the S&P 500 seen
up 0.1 percent and Dow Jones up 0.2 percent.
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An investor looks at an electronic board showing stock information
at a brokerage house in Shanghai, China November 24, 2017. REUTERS/Aly
Earlier, China's blue-chip index climbed off three-week lows hit on Monday and
the Shanghai Composite rose 0.3 percent off three-month lows.
Chinese markets had sold off hard on Monday, tumbling between 0.9-1.3 percent,
extending last week's losses.
Investor confidence in China has been dented by rising bond yields and
authorities' efforts to crack down on leverage, with higher borrowing costs
threatening to squeeze corporate profits.
Hong Kong stocks found a floor, trading flat, and South Korean stocks rose
0.25 percent after big falls in tech shares on Monday. But Taiwan shares still
closed down 0.4 percent at one-week lows.
The MSCI Emerging Market index was up 0.3 percent.
Nickel prices hit their lowest in more than six weeks as the market fretted
about weaker demand in top consumer China and rising supplies from Indonesia.
U.S. light crude was down 46 cents at $57.65 amid uncertainty over the
outcome of a key OPEC meeting this week. Brent crude oil was down 59 cents a
barrel at $63.25. U.S. light crude was 44 cents lower at $57.67.
Spot gold was barely changed.
(Additional reporting by Swati Pandey; Editing by Catherine Evans)
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