Asia shares slip, dollar up as U.S. rate outlook shifts

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Asian shares eased on Monday after a run of upbeat economic data from the United States and globally lessened the risk of recession, but also suggested interest rates would have to rise further and stay up for longer. | Reuters

The early gains were later pared to 131.94 yen but still helped the dollar hold firm on a basket of currencies at 103.090, having jumped 1.2 percent on Friday. The euro was huddled at $1.0791 after shedding 1.1 percent on Friday.

Futures are almost fully priced for a quarter point rate rise in March, and likely another in May, leaving the peak at 5 percent from 4.9 percent ahead of the jobs data. A host of Fed officials are set to speak this week, led by Chair Jerome Powell on Tuesday, and the tone could be hawkish. Policy makers from the European Central Bank and the Bank of England will also be making appearances.Bruce Kasman, head of economic research at JPMorgan, noted recent surveys on manufacturing globally had also shown a bounce in January.

 

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