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Asian markets climb, dollar dips after US figures

3 min

Hong Kong (AFP)

Asian markets climbed on Tuesday, while the dollar struggled to recover from losses against its main peers following mixed readings on the US economy.

The gains came despite a negative lead from New York and Europe, where traders are awaiting key events this week, including Chinese growth data, the last presidential debate and a European Central Bank policy meeting.

A below-par reading Monday on manufacturing in New York offset news that overall factory production grew for the third time in four months.

While investors globally expect US interest rates will rise by the end of the year, the figures tempered expectations for future hikes.

Federal Reserve Vice Chairman Stanley Fischer warned that interest rates would likely be suppressed by several factors including weak economic growth at home and abroad and low corporate investment.

The comments added to downward pressure on the dollar, which fell against the yen, euro and even the pound in New York, and continued to struggle in Asia on Tuesday.

However, regional stock markets rallied. Tokyo ended the morning 0.1 percent higher as dealers brushed off a stronger yen, which hits exporters.

Hong Kong was one percent higher, Shanghai added 0.1 percent, Sydney gained 0.5 percent and Seoul put on 0.2 percent. Singapore, Taipei and Manila also recorded healthy gains.

"We're likely to see some choppy trading until we get some of these risk events out of the way, such as the last US presidential debate," James Woods, an analyst at Rivkin Securities in Sydney, told Bloomberg News. "Momentum seems to be building up for a December rate hike by the Fed."

Attention is now on the release Wednesday of Chinese third-quarter economic growth figures, with an AFP survey predicting a slowdown from the previous three months.

The figures will be closely watched after last week's disappointing trade results were tempered by a better-than-expected inflation reading.

They will be followed later in the day by the third US debate in a bitter presidential election campaign, while the ECB holds a policy meeting Thursday.

ECB chief Mario Draghi will be under pressure to clarify the bank's plans after investors were spooked by talk of an end to its stimulus programme.

- Key figures around 0230 GMT -

Tokyo - Nikkei 225: UP 0.1 percent at 16,924.00 (break)

Hong Kong - Hang Seng: UP 1.0 percent at 23,272.05

Shanghai - Composite: UP 0.1 percent at 3,044.51

Euro/dollar: UP at $1.1016 from $1.1001 Monday

Dollar/yen: DOWN at 103.80 yen from 103.88 yen

Pound/dollar: UP at $1.2237 from $1.2182

Euro/pound: DOWN at 90.02 pence from 90.31 pence

Oil - West Texas Intermediate: UP 26 cents at $50.20 a barrel

Oil - Brent North Sea: UP 24 cents at $51.76

New York - DOW: DOWN 0.3 percent at 18,086.40 (close)

London - FTSE 100: DOWN 0.9 percent at 6,947.55 (close)

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