published Aug 20, 2018, 7:55:49 PM, by Andreea Papuc and Ruth Carson
(Bloomberg) —

The dollar extended a decline against major peers on comments from U.S. President Donald Trump, and Asian stocks traded mixed after muted gains in U.S. equities.

The greenback accelerated a slide after the euro broke through the key $1.15 level amid thin summer liquidity. It had weakened earlier after a report from Reuters that Trump said China and Europe manipulate their currencies as well as separate remarks lamenting the Federal Reserve’s interest-rate increases. Treasuries held Monday’s gains ahead of a meeting of central bankers later this week.

Equities fell in Japan and Australia and were higher in South Korea, while Hong Kong’s futures fell and China’s rose. The Shanghai Composite Index will be closely watched after its rebound Monday, as state-backed funds were seen buying stocks to stabilize the market. U.S. equities pared gains on the Reuters report, though the S&P 500 Index advanced for a third day to close within 15 points of a record.

“It seems that Asia has just woken up to Trump’s comments on Powell and the Fed,” said Rodrigo Catril, currency strategist at National Australia Bank in Sydney. “The move has also been exacerbated by the break above $1.1520 in the euro.”

Investors remain nervous as they await the outcome of talks between the world’s biggest economies on trade that have made their way back onto the agenda. Meanwhile, traders will be closely watching this week’s Jackson Hole symposium for clues on monetary policy, and to see whether central bankers can do anything to help bring back stability after the recent bout of emerging market-led volatility.

Elsewhere, the lira slipped for a second day. Turkish markets are closed for most of this week, which may mean low trading volumes and sharper currency swings than usual. Emerging-market stocks and currencies rose.

Here are some key events coming up this week: Companies announcing earnings include Alibaba, Royal Bank of Canada, Lowe’s, Target, BHP Billiton, Qantas, Ping An and China’s Bank of Communications. Central bankers gather at the Kansas City Fed’s annual Jackson Hole symposium, where Federal Reserve Chairman Jerome Powell speaks Friday. The Fed releases the minutes from latest FOMC meeting on Wednesday.

These are the main moves in markets:

Stocks

Japan’s Topix index fell 0.4 percent as of 9:10 a.m. in Tokyo. S&P/ASX 200 Index lost 0.5 percent. Hong Kong’s Hang Seng Index futures were down 0.2 percent. CSI 300 Index futures rose 1 percent. Futures on the S&P 500 Index lost 0.1 percent. The benchmark climbed 0.2 percent. The MSCI Emerging Market Index gained 1.2 percent, the biggest gain in nearly a month.

Currencies

The yen rose 0.2 percent to 109.87 per dollar. The offshore yuan added 0.1 percent to 6.8295 per dollar. The euro jumped 0.4 percent to $1.1527. The Bloomberg Dollar Spot Index fell 0.3 percent, on course for its fourth consecutive decline.

Bonds

The yield on 10-year Treasuries held at 2.82 percent, the lowest since July 6. Australia’s 10-year bond yield was steady at 2.52 percent.

Commodities

West Texas Intermediate crude rose 0.2 percent to $66.53. Gold rose 0.2 percent to $1,192.25 an ounce after climbing 0.5 percent Monday.

-With assistance from Katherine Greifeld and Jacob Bourne.To contact the reporters on this story: Andreea Papuc in Sydney at apapuc1@bloomberg.net ;Ruth Carson in Sydney at rliew6@bloomberg.net To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net Cormac Mullen
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