GGlobal Markets Dollar firms as suspense builds, Asia shares dip

Business & Markets 2013
Written by Reuters
Tuesday, 21 May 2013 12:37
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SINGAPORE (May 21): "Will he or won't he?" is the question investors
want answered at Wednesday's Congressional testimony by Federal
Reserve Chairman Ben Bernanke, as suspense builds on whether the
Fed will soon start tapering its bond-buying stimulus scheme - as hinted
at by a Fed regional president last week.
The dollar inched higher versus a basket of currencies on Tuesday but
stayed below a three-year high, as investors ponder if Bernanke might
reveal the timing of any wind-down at his appearance before the Joint
Economic Committee before Congress takes its Memorial Day recess.
A start to cutting the bond-buying programme beginning in the northern
summer was hinted at by San Francisco Fed President John Williams
last week - putting the issue firmly on the economic committee's
agenda.
The U.S. dollar index, which measures the greenback's value against a
basket of currencies, edged up 0.1 percent to 83.797 . On Monday, the
dollar index had shed 0.6 percent, retreating from Friday's high of
84.371, its strongest level since July 2010.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.2
percent.
Australian shares slipped 0.7 percent on profit-taking. In South Korea,
the Korea Composite Stock Price Index eased 0.2 percent to 1,978.74,
inching away from a closely-watched resistance level.
"The market atmosphere is pretty good, though it is still facing psychological resistance near 2,000 points," said Kim
Young-june, a market analyst at SK Securities.
Japan's Nikkei share average slipped initially as a pause in the yen's weakness spurred profit-taking, but later showed
resilience.
The Nikkei touched a 5-1/2 year intraday high as retail investors scooped up underperforming shares, and was last up 0.1
percent on the day.
"Institutional investors are actually rather quiet today. It seems to be more retail-investor-driven today," said a senior trader at
a foreign bank.
Against the yen, the dollar edged up 0.2 percent to 102.47 yen but remained below a 4-1/2-year high of 103.32 yen set on
Friday.
Spot gold fell 0.4 percent to $1,388.09. Gold drifted lower on outflows from exchange-traded funds and as the dollar firmed,
putting pressure on bullion which has lost nearly a fifth of its value this year.
Brent crude edged up 0.1 percent to $104.86 a barrel.
Global equity markets had mostly pushed higher on Monday, driven up by a flurry of merger and acquisition activity, with
MSCI's all-country world equity index touching its highest level since June 2008.
U.S. stocks ended little changed on Monday, but both the U.S. benchmark S&P 500 index and the Dow briefly hit all-time
intraday highs. - Reuters