Asian markets extend gains, dollar sinks on stimulus pledges

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Asian equities rallied again and the dollar extended losses on Friday, with traders buoyed by government and central bank pledges to prop up the global economy as the coronavirus sends countries into lockdown.

Despite the painful toll the disease is inflicting on lives and economies, markets are on course to end the week with healthy gains following a barrage of stimulus and monetary easing. While the number of people contracting Covid-19 continues to escalate — the US now has more cases than China and Italy — the support measures, which the G20 said amounted to $5 trillion, have given traders hope that the expected recession will be sharp but short.

The Fed’s promise to effectively print cash has sent the dollar tumbling this week and it continued to fall across the board Friday, with higher-yielding, riskier units enjoying some respite. Oil enjoyed an upturn after taking another severe hit on Thursday from ongoing worries about the impact of the virus on demand as well as the price war between major producers Russia and Saudi Arabia. Adding to crude market weakness was a warning from the head of the International Energy Agency that consumption could drop by 20 million barrels a day.

Also, industry consultant IHS Markit warned that current output levels cannot be sustained throughout the second quarter because storage capacity will fill up.

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