Thursday 04:00 BST. Asian currencies rallied as an overnight fall in the US dollar took its toll on regional markets.

The dollar has come under pressure over the past few weeks, selling off alongside the recent rout in global bond markets. But the greenback was further dented on Wednesday night after weak US retail sales data stirred concerns about economic recovery.

The dollar fell 1 per cent to a reading of 93.617 against a basket of currencies — a fresh three-month low and one of its biggest one-day falls this year. Asian currencies gained, prompting a rough day for shares, particularly exporters.

Japan’s Nikkei was down 0.6 per cent, Australia’s S&P/ASX 200 fell 0.9 per cent and Taiwan’s Taiex was down 0.9 per cent. South Korea’s Kospi, despite its prevalence of exporters, was bucking the trend and was 0.1 per cent higher.

Hong Kong’s Hang Seng was a standout, up 0.3 per cent, while China’s Shanghai Composite was down 0.2 per cent and the Shenzhen Composite had pared early gains to be 0.2 per cent higher.

In the US, headline retail sales were flat in April, against expectations for a 0.2 per cent gain, and down from an upwardly revised 1.1 per cent in March. Stripping out vehicles, petrol and building materials, retail sales were flat, versus expectations for a 0.5 per cent gain, and down from 0.5 per cent the previous month.

The US economy grew by a weaker than expected 0.2 per cent in the first three months of the year, but the Federal Reserve said that some of the forces weighing on those numbers were “transitory” in nature. Wednesday night’s retail sales numbers, though, have tarnished hopes for a spring bounce.

Wall Street finished flat, with the S&P 500 down 0.03 per cent to 2,098.5 and the Dow Jones Industrial Average down 0.04 per cent to 18,060.5. The Nasdaq Composite bucked the trend with a 0.1 per cent gain to 4,981.7.

The Australian and New Zealand dollars were the big winners overnight, both rising more than 1.5 per cent as the US dollar slid.

In morning trade, they were stronger again, with the kiwi up 0.9 per cent to US$0.7549 and the Aussie up 0.5 per cent to a fresh four-month high of US$0.8150. The New Zealand dollar also benefited from data showing retail sales rose quarter-on-quarter in March by 2.7 per cent, the most since 2006.

The South Korean won was up 0.6 per cent, with one US dollar buying 1,093.65 won, while Malaysia’s currency was also performing well, up 0.4 per cent with one dollar buying 3.5815 ringgit. The Japanese yen had reversed overnight gains and was 0.1 per cent weaker at 119.22 in morning trade.

Paul Mackel, head of emerging markets foreign exchange research at HSBC, said the rebound in emerging markets currencies had more to do with a questioning of the US dollar rally and other major themes, such as further monetary easing by global central banks.

“The pause in USD strength, among other supply-side factors, has helped oil prices to recover. That is in turn diminishing global disinflationary fears,” he said.

“This reassessment of earlier global trends has led emerging markets currencies to trade on a reversal of fortune theme. Those currencies that used to be shunned — those vulnerable to US dollar strength, commodity price declines, monetary policy easing either domestically or in Japan — are now appreciating and to a lesser degree, the opposite also holds true.”

Among stock moves, Toshiba rose as much as 6 per cent to Y448 after the company revealed a Y50bn accounting error from the financial years of 2011 to 2013. The market had been expecting a bigger adjustment.

Konica Minolta was the best performer on the Japanese benchmark, up as much as 14.9 per cent to Y1,557, after the company’s announcement on Wednesday of a Y10bn share buyback.

Shares in medical device maker Sirtex Medical surged as much as 35.8 per cent — the best performer on the S&P/ASX 200 — after a US study showed improved survival rates among liver cancer patients whose treatment included the company’s products.

Oil failed to rally on Wednesday night as the US dollar fell, although gold jumped 1.82 per cent to a three-month high of $1,216.67 an ounce. The yellow metal had pulled back to $1,213.15 in early Asian trade, while Brent Crude was 0.3 per cent lower at $66.61 a barrel. West Texas Intermediate was down 0.6 per cent at $60.16.

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