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Dollar up before Yellen, Draghi speeches, Asia stocks head for weekly gain

Dollar up before Yellen, Draghi speeches, Asia stocks head for weekly gain
August 25, 2017
SINGAPORE (Reuters) - Asian stocks traded tentatively on Friday as US political turmoil continued to erode risk sentiment, but the dollar strengthened as attention shifted to the central bankers' symposium in Jackson Hole, Wyoming, that began. Overnight, Wall Street indexes closed between 0.1 percent and 0.2 percent lower as a rift between US President Donald Trump and Congress appeared to widen. In a post on Twitter, Trump said Congress could have avoided a legislative "mess" if it had heeded his advice on raising the amount of money the government can borrow, known as the debt ceiling. That came after Trump said on Tuesday that he would be willing to risk a government shutdown to secure funding for a wall along the US-Mexico border. MSCI's broadest index of Asia-Pacific shares outside Japan, was about 0.1 percent lower in early trade, set to end the week 1.25 percent higher. Investors expect a volatile month ahead with a late-September deadline looming for the United States to raise the its debt ceiling or risk defaulting on debt payments, said Michael Purves, chief global strategist at Weeden & Co in Greenwich, Connecticut. "Why would you rush to buy this (Wall Street) dip with the debt ceiling looming?" Purves said. The MSCI World index was steady, heading for a 0.65 percent weekly gain. Japan's Nikkei climbed 0.25 percent, on track for a loss of 0.4 percent for the week. South Korea's KOSPI was little changed and Australia's S&P/ASX 200 index slipped 0.3 percent. The dollar fared better than stocks as investors turned their sights to the Jackson Hole central bankers' meeting at which Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi are due to speak on Friday, although no new policy messages are expected from either. Yellen and Draghi will are scheduled to speak at 1400 and 1900 GMT respectively. The dollar was also helped by fewer-than-expected US initial jobless claims for the week ended Aug. 19. The dollar was steady early on Friday at 109.51 yen, holding Thursday's 0.5 percent gain, and heading for a weekly gain of 0.3 percent. Japanese core consumer prices rose for the seventh straight month in July, a sign the economy is making slow but steady progress toward meeting the central bank's 2 percent inflation target, although the increase was still largely driven by higher fuel bills. The dollar index, which tracks the greenback against a basket of six major peers, was also little changed at 93.20. It is poised to end the week 0.15 percent lower. The euro was steady at $1.17985, set to end the week 0.3 percent higher. In commodities, crude prices fell overnight as some refiners shut down as Tropical Storm Harvey crossed the Gulf of Mexico, reducing their short-term crude demand. But oil prices rose on Friday as production was shut down on expectations Harvey would be a major hurricane when it reaches the Texas coast on Friday night or early on Saturday. US crude futures rose 0.65 percent to $47.74 a barrel, after Thursday's 2 percent slump. They're on track for a weekly fall of 1.6 percent. Global benchmark Brent advanced 0.4 percent to $52.35, after sliding 0.8 percent overnight. Copper remained near a three-year high hit on Thursday on signs of stronger demand in top consumer China while inventories fell in London warehouses. Benchmark copper on the London Metal Exchange inched up 0.2 percent to $6,700 a tonne, extending Thursday's 1.9 percent gain and set to end the week up 3.3 percent. Gold was steady at $1,286.57 an ounce, heading for a 0.2 percent gain for the week.