Asian shares inched ahead on Wednesday while the dollar and commodities rallied as investors shook off disappointment about U.S. President Donald Trump’s failed healthcare bill and focussed on an improving outlook for global growth. The cheerful mood did not extend to the pound which was on the skids as the British government sent a letter to Brussels formally starting the country’s exit from the European Union.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.2 percent and back toward recent 21-month peaks. Australia’s main index climbed 0.6 percent to its highest since mid-2015.
Japan’s Nikkei added 0.1 percent, having climbed over 1 percent the previous day.
The Dow snapped an eight-day losing streak, its longest run of losses since 2011, in part as a survey showed consumer confidence surged to a more than 16-year high.
“Economic fundamentals still remain exceedingly sound here in 2017 and you do not need Trump’s pro-growth fiscal agenda for this to be one of the best years for growth since the recovery started,” argued Tom Porcelli, chief U.S. economist at RBC Capital Markets.
“We still think tax reform happens, but you are better off thinking about the timing as an end of year event at best.”
The Dow ended Tuesday up 0.73 percent, while the S&P 500 gained 0.73 percent and the Nasdaq 0.6 percent.
The dollar bounced from 4-month lows as a top Federal Reserve official talked of more rate hikes to come while political uncertainties surrounding Britain’s exit from the EU pressured European currencies.
Fed Vice Chairman Stanley Fischer, one of the more influential policy makers with markets, said two more rate increases this year seemed “about right”.
The pound shed a further 0.5 percent to $1.2389 after British Prime Minister Theresa May signed a letter notifying the EU of Britain’s intention to leave the bloc.
The letter is due to be delivered to Brussels later on Wednesday, triggering years of uncertain negotiations that will test the endurance of the European Union.
That came a day after the Scottish Parliament voted in favour of a second independence referendum that would break up the UK.
The euro pulled back to $1.0814, while the dollar bounced to 111.21 yen. Against a basket of currencies, the dollar was a fraction firmer at 99.759.
The biggest loser overnight was the South African rand which has lost almost five percent in two sessions on speculation well-respected Finance Minister Pravin Gordhan might lose his job.
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In commodity markets, base metal prices bounced on more upbeat economic news from China with copper gaining 2 percent overnight.
Oil prices gained after a severe disruption to Libyan oil supplies and as officials suggested the Organization of the Petroleum Exporting Countries and other producers could extend output cuts to the end of the year.
U.S. crude added 15 cents to $48.52 a barrel, while Brent rose 10 cents to $51.43. Spot gold was a shade softer at $1,249.60 an ounce.