Tom Westbrook

SINGAPORE, (Reuters) – Share markets remained steady on Thursday thanks to technology earnings. However, a prolonged European and Chinese energy crisis and the resulting lockdowns in China have kept investors cautious. This has propelled the dollar closer to its 20-year peak as they seek safety and yield.

They rose 0.7% in Asia after Meta, the owner of Facebook (NASDAQ): beat Wall Street profits forecasts. Meta said that it had achieved user growth and sent its shares almost 20% higher after hours.

Wall Street indexes were also helped to steady close by a rally in Microsoft shares (NASDAQ:) overnight. [.N]

The broadest MSCI index of Asia-Pacific shares other than Japan rose 0.5%. This was led by an Australian stock rebound of 1% from Wednesday’s one-month low. ()

The increase was 0.6% ()

“The real question is, whether this really matters for  a durable turnaround in otherwise fraught global circumstances,” said Vishnu Varathan, head of economics at Mizuho Bank in Singapore.

“Volatility is still high .. .even if not outright fear, the trepidation is hard to miss with on-going uncertainty from the war in Ukraine, which continues to threaten with more widespread economic pain.”

Recent pressure points include Russia’s suspension of gas supply to Poland and Bulgaria on Wednesday. This sent shockwaves through European energy markets, and harmed the euro.

The benchmark European gasoline prices rose 10% overnight, while the euro fell to $1.0514 for the first time in five years. This is likely to be its worst month since 2015.

This currency is at risk of falling below huge chart support levels, which range from $1.0500 to $1.0344 in 2017, and a low point from 2017. Breaking the currency would plunge it to levels not seen since 2002, and could lead to a dangerous decline below parity. [FRX/]

This drop has pushed the index to 103.28, a 5-year record. A further push over 103.82 could see it reach levels last seen in 2002.

Jane Foley of Rabobank FX strategy said, “With Covid lockdown concerns in China exaggerating upside risk for the dollar,” and that it was reconsidering its projection for a euro rebound.

U.S. growth data will be available later Thursday. This could cause the dollar to slow down, particularly since overnight data revealed a significant increase in U.S. trade deficit. Forecasts have been downgraded.

The Japanese yen fell to 128.71 on Thursday ahead of the Bank of Japan policy meeting. There, attention will turn to any response to the recent slide in the yen.

Futures fell 0.4% to $104.95 per barrel, as oil prices slipped on concerns about Chinese demand. Rising coronavirus infections suggest that there will be extended lockdowns. [O/R]

Major producer Indonesia supported palm oil’s export ban on Wednesday.