World stocks stabilize as focus remains on dollar drop

Stocks mostly edged up Thursday despite a drop in Asian benchmarks as investors weighed the potential impact of a sharp drop in the dollar this week.

KEEPING SCORE: Germany's DAX was up almost 0.1 percent to 13,418 and the CAC 40 in France rose 0.4 percent to 5,518. Markets were awaiting comments from the European Central Bank, which was due to keep its policies unchanged. Britain's FTSE 100 was flat at 7,645. Wall Street looked set for small gains on the open, with both S&P 500 futures and Dow futures up 0.2 percent.

DAVOS FACTOR: The dollar fell to a three-year low against the euro and dropped sharply against other currencies on Wednesday after U.S. Treasury Secretary Steven Mnuchin said the dollar's recent weakness was "good" for trade. On Thursday, he repeated that the U.S is "not concerned" about the value of the dollar in the short-term. The comment broke with two decades of U.S. policy in which Treasury chiefs largely said they supported a strong dollar and raised concern that the U.S. government might be trying to talk down the dollar's value to help U.S. exporters.

ANALYST'S VIEWPOINT: "The overnight focus had all been on the U.S. dollar with another jab sending the currency weaker against major currencies," Jingyi Pan of IG said in a commentary. "Meanwhile, concern over trade and protectionism is currently the new flavor of the month, adding a tinge of cautiousness in the latest equity surge."

THE DAY IN ASIA: Japan's Nikkei 225 sank 1.1 percent to 23,669.49 and Hong Kong's Hang Seng slipped 0.9 percent to 32,654.45. South Korea's Kospi surged 1.0 percent to 2,562.23 while the S&P/ ASX 200 in Australia fell 0.1 percent to 6,050.00. The Shanghai Composite index lost 0.3 percent to 3,548.31 and India's Sensex dipped 0.5 percent to 35,975.44. Shares rose in Taiwan and Thailand but fell in Singapore and Indonesia.

CURRENCIES: The dollar dipped below 109 yen but was trading late Thursday Tokyo time at 109.02 yen, down from 109.22 yen late Wednesday. The euro slipped to $1.2398 from $1.2411, having earlier hit a new three-year high against the dollar of $1.2461. The ICE U.S. dollar index fell almost 10 percent in 2017 and is down 3 percent so far this year.

ENERGY: Benchmark U.S. crude rose 41 cents to $66.02 a barrel in electronic trading on the New York Mercantile Exchange. It gained $1.14 on Wednesday. Brent crude, used to price international oils, gained 25 cents to $70.78 per barrel. It added 57 cents the day before.