BEIJING/HONG KONG : Asian shares tracked Wall Street lower on Friday, while the dollar held on to its overnight gains, after rate hike guidance from the European Central Bank and upcoming U.S. inflation data unnerved investors.
While the ECB decision was widely expected, the possibility of a larger rise in September weighed on sentiment. The euro zone economy is grappling with slowing growth and soaring inflation exacerbated by a months-long Ukraine war. For months, markets have focused on how fast central banks have been moving to curb inflation. Investors now expect the Federal Reserve to raise interest rates by 50 basis points next week, especially if U.S. consumer price data on Friday confirms elevated inflation.
In currency markets, the U.S. dollar retained its broad strength against a basket of major currencies, hovering around its highest level in three weeks. The euro wallowed at a 2-1/2 week low while the yen gained 0.16 per cent against the greenback, pulling away from a 20-year low.