Published: Thu, April 27, 2017
Business | By Max Garcia

Asian stocks extend gains on bullish Wall Street, euro steady

Asian stocks extend gains on bullish Wall Street, euro steady

US dollar and Euro notes are seen in this November 7, 2016 picture illustration.

Attention was also turning to U.S. President Donald Trump's promised announcement on tax cuts, supporting a reheating of the dollar-positive "Trumpflation" trades that dominated the end of previous year but have waned since.

The US dollar surged against its Canadian counterpart on Tuesday after the United States imposed duties on Canadian softwood, while the euro hit a multi-month high on relief over the French election and the possibility of more hawkish European Central Bank policy in June.

The euro hit US$1.0950, its highest level against the USA dollar in five and a half months, as traders digested centrist candidate Emmanuel Macron's victory in the first round of France's presidential election on Sunday.

However, the near term gains will be limited in the wake of the common currency's short-covering rally, he added.

"Our view on the euro/dollar is that between now and May 7, you'll probably be trading between $1.08 and $1.10", Tan said.

The news that Centrist Emmanuel Macron had made it through to the second round of voting gave the euro a lift as he is expected to ultimately defeat his anti-EU rival Marine Le Pen, meaning France will avoid a "Frexit" scenario.

The Canadian dollar CAD=D4 fell 0.4 percent in early Asian trade after U.S. Commerce Secretary Wilbur Ross said his agency will impose new anti-subsidy duties averaging 20 percent on Canadian softwood lumber imports.

The greenback hit C$1.3615, its highest level against the loonie since late February 2016.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was at 98.89, not far from the one-month low of 98.70 set on Monday.

Markets showed little reaction after North Korea conducted a massive live-fire drill on Tuesday amid heightened geopolitical tensions with the U.S.

Market participants have been anxious that North Korea could conduct its sixth nuclear test, or another long-range missile launch, to coincide with the 85th anniversary of the foundation of its army on Tuesday.

"On a comparative basis, if you were to choose which currency was more underpositioned, euro or sterling, you'd take sterling any day". Similarly, the New Zealand Dollar was negatively impacted.

Trump is facing a Friday deadline for Congress to pass a spending bill funding the government through September or risk marking his 100th day in office on Saturday with a government shutdown.

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