By Nichola Saminather
SINGAPORE (Reuters) – Asian stocks stepped back in subdued trade on Friday as Wall Street took a breather from its relentless rise since the U.S. election, while the dollar hovered below its 14-year high set earlier this week.
MSCI’s broadest index of Asia-Pacific shares outside Japan (), which touched a five-month low on Thursday, eased 0.1 percent, and is headed for a weekly drop of 1.4 percent.
Japan’s Nikkei () also lost 0.1 percent, but is set to end the week with a small 0.1 percent gain.
Overnight, U.S. equities posted their first back-to-back daily declines of the month in light trading as investors took time out ahead of the Christmas weekend. U.S. indices fell as much as 0.4 percent on Thursday.
Wall Street stocks have been on a tear since the U.S. election on expectations that President-elect Donald Trump’s promised fiscal stimulus will boost economic growth and company profits. The Dow Jones Industrial Average () has surged 8.7 percent since before the election.
The markets globally appeared be on pause amid the looming holidays, with the down 0.15 percent on Thursday, and little changed early on Friday.
Europe’s STOXX 600 () index also closed down 0.2 percent on Thursday, with the broader downtrend offsetting optimism on hopes of a government bailout for troubled Italian lender Monte dei Paschi di Siena (MI:).
The Italian government approved a decree early on Friday that will open the way for the rescue of the world’s oldest bank, after it failed to raise enough money from private investors to stay afloat.
Prime Minister Paolo Gentiloni told reporters his cabinet had authorized the creation of a 20-billion-euro ($ 21 billion) fund to prop up Italy’s embattled banking sector, with Monte dei Paschi expected to be first in line for help.
In the foreign exchange markets, the dollar was subdued after having scaled its highest point since December 2002 on Tuesday. It has since hovered below that level, with traders unwilling to make any big moves ahead of the holiday weekend.
The (), which tracks the greenback against a basket of six global peers, was steady at 103.06, down from Tuesday’s 103.65 peak. It is poised for a weekly gain of 0.1 percent.
The dollar inched down 0.1 percent against the yen to 117.49, set to end the week 0.4 percent lower.
Still, most traders retain positive bets on the U.S. currency, particularly after upbeat economic data including business spending, and an upward revision to third-quarter economic growth on Thursday.
“The trend is definitely for a stronger dollar,” Stephen Casey, senior currency trader at Cambridge Global Payments in New York. “Any dip in the dollar will a buying opportunity.”
The euro was also flat at $ 1.04375 early on Friday, set for a loss of 0.2 percent for the week.
Sterling was little changed at $ 1.2278, on track for a weekly slide of 1.6 percent.
Oil prices slipped after posting gains on Thursday on the strong U.S. economic data and optimism that crude producers would keep to their pledge to limit output.
U.S. crude () retreated 0.6 percent to $ 52.66 a barrel in early Asian trade on Friday, but remains on track for a 1.4 percent gain for the week.
The decline in gold prices which have languished in the wake of the dollar’s rally, slowed on Friday.
was steady at $ 1,128.84 an ounce, heading for a weekly loss of 0.5 percent.