Asia Shares Nudge Higher, Dollar Eases

Asian shares edged higher on Tuesday while the dollar remained on the backfoot for a third straight session, as heightened expectations of an imminent European rate cut helped whet risk appetite.

Taiwanese shares climbed 0.5% to a record high, while Hong Kong's Hang Seng index trimmed some earlier gains to be up 0.1%. I Photo: Focus Taiwan/ Central News Agency (CNA)

Gains were limited ahead of key inflation readings this week, Stella Qiu reported for Reuters.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2% after a 0.9% increase on Monday.

Taiwanese shares climbed 0.5% to a record high, while Hong Kong's Hang Seng index trimmed some earlier gains to be up 0.1%. Japan's Nikkei, on the other hand, slipped 0.2%, reversing some of a 0.7% advance a day ago.

Europe is set for a slightly stronger open, with EUROSTOXX 50 futures up 0.2%.

That would build on gains overnight after a slew of European Central Bank officials said the ECB has room to lower interest rates as inflation slows. With debate now shifting to subsequent moves, markets have fully priced in two rate cuts by October this year.

That in turn guided Wall Street stock futures higher ahead of the reopening of US markets after a public holiday.