US dollar rises; Asian stocks set for muted open

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(Oct 26): The U.S. dollar edged higher at the start of the week as U.S. coronavirus infections hit a record for a second day. Asia stocks were set for a muted open as stimulus talks stalled in Washington.

The British pound advanced after trade talks between the U.K. and the European Union were extended to Oct. 28. U.S. House Speaker Nancy Pelosi and the White House traded blame for the latest stall in negotiations on a new stimulus package as chances faded of a resolution before next week’s election.

Equity futures edged up in Australia and were little changed in Japan. Hong Kong is closed for a public holiday Monday.

U.S. stocks rose Friday as investors held out hope for a spending package, with the S&P 500 Index paring a weekly decline. Treasuries advanced, though the 10-year yield remains above 0.8%.

Concerns remain that rising virus cases will force additional business closures. The U.S. added another 85,317 cases.

President Donald Trump’s chief of staff said the U.S. isn’t going to “control” the pandemic. U.S. Vice President Mike Pence’s chief of staff tested positive, raising the prospect of another outbreak within the White House. Cases also continue to surge in Europe and other parts of the world.

China is rethinking its yuan internationalization strategy and a senior central bank official called for more proactive with policies to support markets, including improving bilateral currency swap agreements.

Here are the major moves in markets:

Stocks

  • The S&P 500 Index rose 0.3% Friday.
  • Nikkei 225 futures edged up 0.3%.
  • Australia’s S&P/ASX 200 Index futures climbed 0.3%.

Currencies

  • The yen was little changed at 104.73 per dollar.
  • The offshore yuan was at 6.6652 per dollar.
  • The euro fell 0.1% to US$1.1854.
  • The British pound rose 0.2% to US$1.3059.

Bonds

  • The yield on 10-year Treasuries fell one basis point to 0.84% Friday.

Commodities

  • West Texas Intermediate crude lost 1.9% to US$39.85 a barrel Friday.
  • Gold was little changed at US$1,902.05 an ounce.