Emerging Asia propels world stocks to new high

A weak U.S. dollar combined with upbeat Chinese data to lift emerging market and Asian shares to levels not seen in more than two years and global stocks to an all-time high on Wednesday.

With the world's most widely-used currency near 10-month lows, there has been an indirect loosening of financial conditions for emerging markets which also serves to support riskier assets such as equities. 

After decent gains in Asia on the back of positive signs from global economic powerhouse China this week, MSCI's world stocks index .MIWD00000PUS looked set for a ninth day of gains which would mark its longest winning streak since October 2015.

The U.S. dollar - which dropped sharply on Tuesday after the collapse of a healthcare bill dealt a blow to President Donald Trump's ability to deliver promised fiscal reforms - could muster little more than tentative gains on Wednesday. 

Against a basket of other major currencies, it was up 0.3 percent at 94.878, but still down around 7 percent on the year and within sight of Tuesday's low of 94.476. .DOXY 

Analysts said the slight gains in the dollar were down to expectations the European Central Bank and the Bank of Japan may strike dovish tones when they meet on Thursday which could dent recent strength in the euro and the Japanese Yen. 

The ECB is expected to adjust their language but substantive changes to their policy will likely come later in the year. The BOJ is expected to raise its growth forecast but cut its inflation outlook, underlining the cautious tone adopted recently by major central banks. 

The euro inched down against the dollar EURO=EBBS, having made a 14-month top on Tuesday. 

The diminished prospect of fiscal spending in the U.S. has been a boon to bonds, especially as a run of soft U.S. inflation readings had lessened the risk that the Federal Reserve would need to be aggressive in removing its stimulus. 

Yields were broadly lower across the euro zone for a second straight day on Wednesday, with U.S. Treasury yields trading near three-week lows.