Gains seen overnight on Wall Street failed to translate during the Asian session, despite the Dow Jones industrial average gaining more than 400 points. Other major U.S. stock averages also recorded significant gains.
Those moves higher overnight came as traders saw hope of avoiding a trade war in Chinese President Xi Jinping’s remarks about further opening up China’s economy.
The policy plans outlined by Xi during a Tuesday speech included reducing tariffs for autos and improving intellectual property rights protection. China wants to increase its imports and would accelerate plans to open up the financial services sector, Xi claimed.
Those comments, which allayed some fears of a U.S.-China trade war, boosted market sentiment in the last session, even though analysts said the measures highlighted by Xi were largely in line with his previous policy messaging.
“Seeing is believing of course … but for now the market chooses to believe that Xi’s words will prove to be more than mere platitudes in coming months,” Ray Attrill, head of foreign exchange strategy at National Australia Bank, said in a note regarding stocks’ overnight advance.
Against the safe-haven Japanese currency, the dollar mostly held onto gains made against the yen amid the improvement in investor confidence overnight. The dollar traded at 107.10 at 8:03 a.m. HK/SIN, compared to levels around the 106.9 handle seen before Xi’s Tuesday speech.
The Australian dollar was supported by the pick up in market sentiment and last traded at $0.7763. Meanwhile, the dollar index, which tracks the dollar against the six currencies, was softer at 89.569.
On the commodities front, oil prices were steady after jumping more than 3 percent in the previous session as trade concerns ebbed.
On the economic front, Japan core machinery orders rose 2.1 percent in February compared to the month before, topping a median forecast of a 2.5 percent drop in a Reuters survey.