Asian markets extend gains dollar dealers cautious

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Asian Markets Extend Gains, Dollar Dealers Cautious

Asian markets continued their upward trend on Friday, with major indices in the region extending their gains for a second consecutive day. The rally was driven by a combination of factors, including optimism over the global economic outlook and a weaker US dollar.

In Tokyo, the Nikkei 225 index surged 1.2% to close at 28,444.55, while the Hang Seng index in Hong Kong rose 1.1% to 29,444.55. The Shanghai Composite index in China also gained 0.8% to 3,344.55.

The gains in Asia came despite a mixed performance on Wall Street overnight, where the S&P 500 index fell 0.2% to 4,144.55. The dollar, which has been under pressure in recent weeks, weakened further against major currencies, including the euro and the yen.

Dollar dealers were cautious, however, citing concerns over the potential for a sharp reversal in the currency's fortunes. "The dollar's weakness is likely to be short-lived, and we expect it to rebound once the market realizes that the global economy is not as strong as it seems," said a currency trader at a major bank.

The dollar's weakness has been a major factor in the recent rally in Asian markets, as a weaker currency makes exports cheaper and more competitive in the global market. However, some analysts are warning that the dollar's decline could be a sign of underlying weakness in the US economy, which could ultimately lead to a sharp reversal in the currency's fortunes.

In other markets, oil prices rose 1.2% to $65.55 a barrel, while gold prices fell 0.5% to $1,344.55 an ounce.

Overall, the gains in Asian markets were seen as a positive sign for the global economy, which has been struggling to recover from the COVID-19 pandemic. However, the dollar's weakness and the potential for a sharp reversal in the currency's fortunes remain major concerns for investors.