SINGAPORE: Asian shares fell on Friday and the safe haven dollar hovered near its highest in a week and a half after weak manufacturing data from the United States, Europe and China heightened fears over the outlook for global growth.
SYDNEY (Reuters) – The safe haven US dollar hovered at 1 1/2 week highs against a basket of major currencies on Friday, staying buoyed following a long anticipated credit ratings downgrade of the world’s major banks by Moody’s.
A long expected downgrade to the credit ratings of 15 of the world’s biggest banks by ratings agency Moody’s added to the gloom, which also weighed on commodities and currencies such as the Australian dollar that are linked to resource demand.
MSCI’s broadest index of Asia Pacific shares outside Japan and Tokyo’s Nikkei share average both slipped 0.8 percent.
US stocks fell around 2 percent on Thursday, racking up Wall Street’s worst loss in three weeks, after a survey showed US factory growth at its slowest in 11 months in June.
That followed data showing the euro zone’s private sector shrank at its fastest pace in three years this month, while Chinese manufacturing contracted for an eighth straight month.
The darkening outlook for the world economy has sparked a sharp sell off in commodities this week, with Brent crude oil falling below $90 a barrel for the first time in 18 months.
Brent crude was up 0.3 percent at around $89.50 a barrel on Friday, but remained on course for a weekly loss of more than 8 percent.
Copper eased a touch further, after tumbling in the previous session, to trade around $7,336.50 a tonne.
The dollar was steady against a basket of major currencies, after gaining nearly 1 percent on Thursday in its biggest rally in more than three months.
DXY, which measures the strength of the greenback against a basket of currencies, fell 0.7 percent, making dollar priced commodities attractive for importers.
The euro was traded around $1.2552, up a little on the day but well off the week’s peak of $1.2748 scaled on Monday.
The Australian dollar bought $1.0045, having dropped more than 1.3 percent from Thursday’s high of $1.0205.
Gold was steady around $1,565 an ounce, after falling 2.5 percent on Thursday to wipe out almost all its gains of 2012 as the worries over the global economy robbed the precious metal of its inflation hedge appeal.
Danielle Northrop is a business journalist based in Sydney, Australia. Danielle has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Danielle spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.