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Traders in Asia
said shares were helped by hopes that the concern about a
stronger dollar expressed by the U.S. President-elect at the
weekend would benefit emerging markets where companies have
borrowed heavily in dollars.
MSCI's ex-Japan Asia-Pacific shares index <.MIAPJ0000PUS> rose
0.3 percent, just shy of last Thursday's three-month high.
Energy and cyclical stocks gained the most.
Short-covering helped, especially in China <.SSEC>, where stocks
tumbled more than 4 percent last week as traders took some money
off the table before Trump's inauguration on Friday.
European stock markets <.FTEU3> were broadly steady after a
choppy start. Banking shares came under pressure as investors
chewed over details of the impact of regulatory fines on
Deutsche Bank.
Futures showed Wall Street set to open less than 0.1 percent
higher.
"Everything has taken a breather after the strong start in
January for stocks," said Andy Sullivan, a portfolio manager
with GL Asset Management UK in London. "The last few days have
been choppier, and for the rally to be sustained, we need to see
earnings growth start to come through."
MSCI's broadest index of global share prices <.MIWD00000PUS>
reached its highest since mid-2015 on Friday and, driven by a
bounce in expectations for U.S. inflation and growth since
Trump's election, is within sight of all-time highs.
But worries about the new U.S. president's attitude to trade and
politics, with relations with China in focus, have begun to show
up more in some asset prices since the start of the year.
The dollar fell almost 1 percent on Tuesday and is on course for
its worst two weeks since the election after Trump expressed
concern about the dollar's strength in the context of trade
relations with China.
It recovered around 0.3 percent on Wednesday, with eyes on a
speech by the head of the Federal Reserve and U.S. inflation
data for clues on the path of interest rates.
Sterling, which soared more than 3 percent on Tuesday after
Prime Minister Theresa May's Brexit speech, fell back 0.7
percent.
"Everything is just a partial reversal of the price action
yesterday," said RBC Capital Markets currency strategist Adam
Cole, arguing that the dollar's weakness had been primarily
driven by excessive positioning at the end of last year.
With doubts growing about the sustainability of the "Trump
trade" - higher stocks and a stronger dollar - investors'
favorite safe havens for capital have been in demand.
Gold <XAU=> was perched just off a two-month high around 1215
dollars per ounce. It is up nearly 8 percent in the last three
weeks. The yen dipped half a percent as the dollar rose on
Wednesday, but is still trading around its highest in seven
weeks.
Oil prices fell by just over 1 percent, with benchmark Brent
futures <LCOc1> dipping to $54.70 per barrel and U.S. crude to
$51.68.
(Editing by Larry King)
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