appetite.
Equities were
expected to continue sagging in the European session, with spreadbetters
forecasting a slightly lower open for Britain's FTSE, Germany's DAX and
France's CAC.
The greenback
was boosted by a fall in the euro after the European Central Bank shot down
talk it was contemplating tapering its monetary easing - sending the common
currency to its lowest since March.
MSCI's
broadest index of Asia-Pacific shares outside Japan was down 0.4 percent.
Japan's Nikkei
brushed a six-month high earlier on a weaker yen but was last down 0.3
percent.South Korea's Kospi lost 0.5 percent and Australian stocks shed 0.2
percent, weighed down by a retreat in energy shares. Singapore fell 0.7 percent
and Shanghai erased earlier gains and dropped 0.2 percent as the yuan
depreciated.
China's
offshore yuan fell to its lowest level in six years against the broadly
stronger dollar.
"Further
yuan depreciation, which many people expect, is good for exporters, but it will
also have a negative psychological impact and curb risk appetite," said
Yang Hai, analyst at Kaiyuan Securities.
The ECB left
its ultra-loose monetary policy unchanged on Thursday but kept the door open to
more stimulus in December, with ECB President Mario Draghi dousing recent
market speculation that the central bank may begin tapering its 1.7 trillion
euro asset-buying program.
"The
European Central Bank removed a source of immediate risk for traders by
revealing that it did not discuss tapering its QE program at this month's
meeting," wrote Ric Spooner, chief market analyst at CMC Markets.
"Decisions
are being deferred until December pending the outcome of research - meaning
that meeting will be a key focus for markets."
The dollar
index touched 98.564, its highest since early March.
The euro was
down 0.3 percent at $1.0902 after seeing a seven-month trough of $1.0896.
The dollar was
little changed at 103.900 yen after rising 0.5 percent overnight.
Sterling
slipped 0.1 percent to $1.2236, taking in stride comments by European Council
President Donald Tusk that British Prime Minister Theresa May had confirmed that
Brexit talks would be triggered by end-March 2017.
U.S. crude
futures were down 0.5 percent at $50.37 a barrel. The contract lost more than 2
percent on Thursday as the dollar's surge prompted profit-taking on a rally
that sent U.S. crude to 15-month highs midweek. Brent crude lost 0.4 percent to
$51.16 a barrel. [O/R]
A stronger
greenback tends to increase the purchase cost for non-U.S. buyers of
commodities such as crude oil and gold, which are denominated in the dollar.
Spot gold was
down 0.15 percent at $1,263.66 an ounce, although it was on track for a 1
percent gain on the week.
Reuters
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