Asia shares retreat from nearly two-year peak, dollar firms | Reuters

By Lisa Twaronite
| TOKYO

TOKYO Asian shares turned lower on Thursday after earlier briefly nudging up to near two-year highs, while the dollar benefited from waning expectations that the European Central Bank was poised to end its easy policy.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.3 percent, stepping back from morning trade when it nudged close its loftiest levels since June 2015.

Australian shares firmed 0.3 percent, helped by an overnight gain in oil prices. Strong energy shares had helped the U.S. S&P 500 .SPX end higher overnight.

The Federal Reserve’s monetary outlook and policymaking under U.S. President Donald Trump have held sway in financial markets over the past few months. While investors have more or less come to terms with rising rates in the United States, concerns remain around the Trump administration’s ability to set U.S. growth on a higher gear.

Last week’s failure of Trump’s U.S. healthcare reform bill reinforced those doubts.

The dollar index, which tracks the U.S. currency against a basket of six major rivals, was up 0.1 percent on the day at 100.060 .DXY. It was lifted to a one-week high overnight as the euro slipped on concerns about the impact of Brexit as well as news that ECB policymakers are keen to reassure investors that their easy-money policy is far from ending.

The euro was down 0.1 percent at $1.0750 EUR=, after Reuters reported ECB policymakers were wary of changing their policy message after tweaks this month upset investors and raised chances of a surge in borrowing costs.

Prime Minister Theresa May formally began Britain’s exit from the European Union on Wednesday, launching a two-year negotiation process before the divorce comes into effect in late March 2019.

Sterling edged up slightly on the day to $1.2445 GBP= after skidding to a one-week low of $1.2377 overnight.

“Brexit, to some extent, has been covered in…

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