Dollar Weakens as Fears of Syrian Crisis Easing

Asian stock prices rose this morning for the second consecutive day as investors hope for new positive economic data from China, and fears regarding the Syrian crisis have subsided.

On the Tokyo Stock Exchange, the Nikkei index was up about 1.3 percent at 7:30 AM, while stock prices in Australia, Shanghai, South Korea, Singapore, and Hong Kong rose between 0.1 and 0.6 percent.

The MSCI index of Asia-Pacific stocks, excluding Japan, was up 0.8 percent at 7:30 AM, after jumping 1.3 percent yesterday.

This index reached its highest level since early June as yesterday’s strong rise in stock prices on Wall Street, following better-than-expected data from China, lifted investor sentiment.

After a prolonged period of slowing growth, a series of recent data points to stabilization in the world’s second-largest economy.

Investors hope that new reports on industrial production and retail sales will confirm this.

The Japanese Nikkei index continued to strengthen, buoyed by the euphoria surrounding Tokyo’s selection as the host city for the 2020 Olympic Games.

This is expected to positively impact the world’s third-largest economy, and today, as yesterday, construction and tourism company stocks saw the largest gains.

The market was also positively influenced by the postponement of the U.S. Congress vote on President Barack Obama’s proposal for a limited military strike on Syria to punish President Bashar al-Assad for the chemical weapons attack on civilians.

Russia proposed yesterday that Syria’s chemical weapons be placed under international control, and Obama stated that he would seriously consider this proposal.

As a result, investor fears of disruptions to oil supply from the Middle East have eased, leading to further declines in oil prices.

After the price of a barrel of ‘black gold’ fell 2.1 percent on the London market yesterday, it dropped another 0.7 percent this morning to $112.90. The futures price of oil on the New York exchange slid another 0.8 percent to $108.60.

In the currency markets, the dollar weakened as fears of escalation in the Syrian crisis subsided, as did concerns over a significant cut in the Fed’s stimulus monetary programs.

According to a Reuters survey, analysts expect the U.S. central bank to modestly reduce its $85 billion monthly stimulus programs by $10 billion.

As a result, the euro exchange rate reached $1.3260 this morning, compared to $1.3170 at the same time yesterday.

Against the Japanese currency, the dollar price remains stable around 99.60 yen, while the euro exchange rate jumped from yesterday’s 131.20 to 132.10 yen.