Asian markets rally on CPI data, but dollar weakens

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Asian markets rally on CPI data, but dollar weakens

SYDNEY, NSW, 2000- Stocks in Asia rallied on Thursday after the release of July CPI data in the U.S. overnight, which saw the annual inflation rate cap at 8.5 percent, the same as the previous month.

Sentiment was that the Federal ReserveFederal Reserve may not be as aggressive in raising rates.

Since the Fed's commitment to fighting inflation, the rise in real yields has been an enormous problem for valuations in 2022, so any dovishness is seen as positive for the highest valued companies, said Oliver Blackbourn, multi-asset portfolio manager at Janus Henderson Investors.

He said that the potentially more dovish outlook undermined a key support for the U.S. dollar.

The Australian All Ordinaries rose by 86.70 points or 1.20 percent to 7,325. In New Zealand, the S&P NZX 50 edged up 7.92 points or 0.07 percent to 11,760. The Kospi Composite increased 42.90 points or 1.73 percent to 2,523. In Hong Kong, the Hang Seng surged 471.59 points or 2.40 percent to 20,082. The CPI data showed that the U.S. dollar lost ground in the Asian trading zone on Thursday, as the U.S. dollar was bit hard overnight.

The euro rose to 1.0322 by the Sydney close. The British pound went up to 1.2219. The Japanese yen gained sharp gains overnight to trade at 132.51. The Canadian dollar was trading strongly at 1.2770. The Australian dollar was strong at 0.7092. Overnight on Wall Street, the Nasdaq Composite accelerated by 360.88 points or 2.89 percent to 12,854. The Dow Jones industrials surged 535.10 points or 1.63 percent to 33,309. The Standard and Poor's 500 rose by 87.77 points or 2.13 percent to 4,210.