In This Article:
(Corrects gold price to $1,886 from $1,1886)
* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Euro near highest since late 2018 as dollar sinks
* China shares down over 3% on Sino-U.S. tensions
* Gold approaching record peak amid COVID uncertainty
By Wayne Cole
SYDNEY, July 24 (Reuters) - Asian shares skidded from six-month peaks on Friday as Sino-U.S. tensions soured what had been an upbeat week, while the euro held near a 21-month top against the embattled dollar and gold neared a record high.
For once, currencies had dominated trading as a deal on a European Union recovery plan shot the euro to its highest since late 2018. The single currency was last holding at $1.1602 having climbed 1.5% for the week so far.
That was taken as a signal to sell the dollar, which was down 1.4% on the week against a basket of currencies at 94.645 and heading for its fifth straight weekly loss.
It also breached the March low of 94.650 to reach depths not visited since late 2018.
"The USD bear case continues to sharpen with a break of the 94.65 March lows likely ushering in the next leg down," said Westpac analyst Richard Franulovich.
"Europe has reached a major milestone in its fiscal arrangements, the Recovery Fund amounting to a European Treasury that will fund EU expenditure via capital market borrowing."
He noted the dollar faced a major hurdle next week when a Federal Reserve policy meeting was likely to take a very dovish lean as the spread of the coronavirus threatened recovery.
For equity markets, the mood darkened after Beijing ordered the United States to close its consulate in Chengdu, in retaliation for being told to shut its consulate in Houston earlier this week.
Chinese blue chips retreated 3.7% as a result, wiping out a week of gains.
MSCI's broadest index of Asia-Pacific shares outside Japan lost 1.7%. Tokyo was closed for a holiday, but Nikkei futures were trading 350 points below the last cash close.
E-Mini futures for the S&P 500 edged down 0.3%, while EUROSTOXX 50 futures eased 1.1% and FTSE futures 1.0%.
The market's dogged optimism on economic recovery had been challenged on Thursday by data showing the number of Americans filing for unemployment benefits unexpectedly rose last week for the first time in nearly four months.
Analysts said there were some technical reasons for the surprise but noted claims were still more than double their worst weekly levels seen during the global financial crisis.
It came as U.S. law makers struggled to agree on a new round of stimulus measures ahead of the expiry of desperately needed unemployment benefits.