Dollar slides on Trump concern, but stocks rise

LONDON, May 19 (Reuters) - The dollar was on track to record its worst week against a basket of currencies since July on Friday, having given up nearly all the gains made since Donald Trump, now surrounded by political worries, was elected USA president a year ago.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1 percent, on track for a weekly loss of 0.5 percent. It rose 0.95 per cent yesterday to a six-month high of US$1.1205.

MSCI's main emerging markets index clawed back some ground on Friday but it remained on track for its worst week of the year so far.

After cratering on Thursday amid allegations Temer approved hush-money payment to the jailed former house speaker, Brazil's benchmark Bovespa stock index was up 1.7 percent after earlier rising over 3 percent.

This week's roller-coaster was triggered by political uproar over Trump's firing of Federal Bureau of Investigation director James Comey and allegations he pressed Comey to stop investigating his former national security chief and his campaign's alleged ties with Russian Federation.

Approaching close in London, the S&P 500 had risen 0.7% to 2,383 while a similar move left the technology-laden Nasdaq on 5,666.

Against a trade-weighted basket of six currencies, the dollar slid by nearly 2 per cent this week, wiping out all the gains of the "Trump bump" since November 9.

The US yield curve slumped during the week to levels not seen since Mr Trump's election, and the probability given by markets of the Fed raising rates next month has tumbled to below 60 per cent from over 90 per cent last week. The single currency has gained more than 2.5 percent this week, headed for its best performance since February 2016. The Canadian dollar was trading at C$1.3516 to the greenback, or 73.64 US cents, up 0.6 percent. Prices of oil, one of Canada's major exports, were heading for the second week of gains on expectations big crude exporters will extend output cuts to curb a persistent glut in inventories.

It weakened 0.25 percent to 111.225 yen, erasing some of Thursday's 0.6 percent gain, and was set for a 1.8 percent fall over the week.

Benchmark 10-year note yields were unchanged on the day at 2.23 percent, after earlier rising as high as 2.26 percent.

Brent crude settled up $1.10, or 2.1 percent, at $53.61, the highest settlement for the Global benchmark since April 18. Expectations increased that big crude exporters will extend output cuts to curb an inventory glut.Brent crude was up 2 percent at $53.58, while USA benchmark crude oil surged 2 percent to $50.34. Spot gold was up 0.5 per cent at $1,253.31 per ounce at one point, putting it up 1.9 per cent for the week.

Brent crude was up two per cent at $53.58, while United States benchmark crude oil surged two per cent to $50.34.

Investors piled into safe-haven assets such as gold, in the wake of continued political pressure engulfing President Trump, as they feared that the ongoing political saga in Washington could dampened President Trump's ability to deliver on his economic agenda.

  • Zachary Reyes