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Asian Markets Tumble as US Dollar Continues To Strengthen

November 11, 2016
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The strengthening of the US dollar has resulted in weakening of many emerging economies. The stock market in Shanghai entered the bullish mode, but the other Asian markets continued to suffer. The increase in the value of US dollar has resulted in reduction of demand for the assets of the emerging markets.

The ongoing practice of sell off in US treasury and the election results has resulted in a strong US dollar. Specifically, the benchmark 10-year treasury note offered an increase of 2.1378% yield which was around 1.8% at the beginning of this week. Similarly, the yield of 30-year Treasury bond increased by 2.9453% which is the highest recorded level since January 12.

By the end of Wednesday, Shanghai market climbed by 20% compared to the massive hit in January. The Shenzan finished up at 0.531%. Yen continued to lose against the dollar and it ended up at 106.53. In the beginning of this week, Yen was at 102 levels against the US dollar. The mining market of Australia has gained significance because Trump has talked about changes in the infrastructure during his campaigns. South Korean market closed when it hit one of the lowest points after reducing by 0.91%.

Investors are hoping that Donald Trump’s presidency will improve the economics because he focused on aggressive spending during his campaigns. To control inflation, the US Federal Reserve is expected to increase the interest rates. As a result, the oil prices went down by 1% as the markets focused on oversupply.