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By Swati Pandey
SYDNEY (Reuters) – Asian stocks collapsed on Wednesday and the dollar hit a record high of nearly a year and a half as risky assets retreated in the face of mixed signals about the prospects of defusing the Sino trade dispute -American.
The broadest MSCI index of Asia-Pacific equities outside Japan <.MIAPJ0000PUS> was last flat with the Australian stocks the biggest drag. <.AXJO>
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Nikkei from Japan <.N225> gained 0.5 percent while the KOSPI index of South Korea <.KS11> was a firmer contact.
Asian markets tumbled Tuesday after US President Donald Trump had said in an interview with the Wall Street Journal that it was "very unlikely" that he would accept China's request to delay an expected increase in prices.
However, White House economic adviser Larry Kudlow sought to illuminate the mood by confirming the holding of a pow-wow between Trump and his Chinese counterpart Xi Jinping at an upcoming rally. of the G20 in Argentina. He also suggested that the two countries could reach a trade deal.
The news has boosted the main Wall Street indexes, which ended in positive territory after spending a good part of the session in the red.
However, it was still unclear whether the two sides had agreed on an official agenda for the leaders' meeting after the G20 summit and Kudlow said there was no scheduled field talks for their advisers.
At the same time, a German magazine reported, quoting European sources, that Trump could impose tariffs on imported cars from next week, thus reducing European motor vehicle stocks.
"The mood of the market has become cautious again with a host of commercial headlines suggesting the prospect of a new wave of commercial rates," said Rodrigo Catril, senior strategist at National Australia Bank.
"The market seems to be in the shadows at the moment and, in this context of uncertainty, the US dollar remains the preferred option to weather the storm."
The dollar index <.DXY>, which measures the greenback versus a basket of major currencies, jumped overnight to 97,363 to move closer to a one and a half year high of 97,661 set earlier this month.
Investors will now focus on Wednesday's speech by Federal Reserve Chairman Jerome Powell on the number of times the central bank is likely to raise interest rates.
The event has become all the more critical as the signs of a global slowdown and the volatility of nearly two months of the market have clouded a rather optimistic American picture, prompting speculation to a slowing of the market. higher rates next year by the Fed.
Traders are also following the speech in light of Trump's criticism of Powell in an interview with the newspaper, saying the rising interest rates and other Fed policies have hurt the US economy.
Elsewhere, in the foreign exchange market, the British pound was among the most successful overnight.
British Prime Minister Theresa May will travel to Scotland on Wednesday with her Brexit argument, where she will likely face a fierce battle to convince skeptical voters of the benefits of her agreement for business.
May has to win a vote in parliament on December 11 to approve its deal, but that sounds difficult with a seemingly considerable majority of lawmakers – including the Scottish National Party, which holds 35 of the 59 seats in the Scottish Parliament – against.
(Edited by Shri Navaratnam)
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