Asian stocks were notably higher on Tuesday, taking cues from Wall Street which had another day of solid gains on Monday. The Shanghai Composite was 1 percent higher as of 2:11 p.m. HK/SIN, and Australia’s ASX 200 which had recently been bucking the upswing was up 0.60 percent, buoyed by increases in the materials and financial sectors. South Korea’s Kospi was up 0.61 percent, driven by gains in the technology sector. Only Japan’s Nikkei 225 was down, coming off yesterday’s bank holiday to trade down 0.66 percent after rising earlier in the session. Investor confidence is slowly returning after the worst week on Wall Street in two years, but a cloud of caution is still hovering over traders worldwide. U.S. inflation data expected later this week will be a catalyst for market movement and will solidify whether the downturn was just a natural fluctuation or a sign of longer-term challenges.
Currency Movements
On the currency markets, the dollar struggled against its primary trading partners, sending the dollar index 0.18 percent lower to 89.94 .DXY after hitting a high of 90.567 last week when the dollar regained popularity in the wake of the widespread stock selloff. The greenback was down 0.52 percent against the yen to 108.08, and was trading lower against the euro and the British pound as well.
The South African rand was the biggest loser on Tuesday morning, falling 0.5 percent after it was announced that President Jacob Zuma would be ousted by the country’s ruling African National Congress rather than stepping down. Zuma has lead the country since 2009 but has been facing allegations of corruption for most of his reign, which he has consistently denied. In addition to political turmoil, South Africa is facing an even more pressing national crisis due to a severe drought which is threatening to dry out taps nationwide in a matter of weeks if there is no rain or manmade solution implemented by April.