Asian Shares Retreat As Coronavirus Surge Hits Sentiment

The dollar index stood at 93.819, close to a two-week high as signs of a stalling U.S. economy drove safe-harbour flows into the greenback.

The one currency that the dollar fell against was the yen, which strengthened 0.22% to 105.24 per dollar given the Japanese currency is also seen as a haven.

The euro was unchanged at $1.1704, while a firmer U.S. dollar dragged on sterling, which was last trading at $1.2893, down 0.17% on the day.

Spot gold fell 0.22% to $1,904.53 an ounce.

The coronavirus outbreak originated in China last year, but Beijing’s aggressive efforts to control the virus mean its economy is recovering faster than other major countries, which suggests an improvement in corporate earnings.

Hong Kong shares in Semiconductor International Manufacturing Corp (SMIC) rose 0.81% on Friday after China’s top chipmaker raised revenue and gross margin forecasts for the third quarter.

In contrast, many European countries have resumed lockdowns, and London will enter a tighter COVID-19 lockdown from midnight on Friday as Prime Minister Boris Johnson seeks to tackle a swiftly accelerating second coronavirus wave.

The European Union put the onus on Britain to compromise on their new economic partnership or stand ready for trade disruptions in less than 80 days, another negative for sterling.

The Australian dollar fell 0.3% versus the greenback at $0.7075, hurt by a decline in commodities.

Oil prices were weighed by concerns about the coronavirus and its impact on the world economy. Brent crude futures fell 1.11% to $42.68 a barrel, while U.S. crude futures slipped 1.1% to $40.51 a barrel.

Traders’ preference for safety helped government bonds. The yield on U.S. Treasuries benchmark 10-year notes eased to 0.7289%, while the two-year yield held at 0.1390%.

(Editing by Sam Holmes and Jacqueline Wong)

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