SINGAPORE (REUTERS) - Asian stocks slipped on Monday (July 24) as demand for riskier assets ebbed after recent strong gains, while the euro's near-two-year high on the European Central Bank's seeming lack of concern about its strength left the dollar languishing near a 13-month low.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1 per cent early on Monday.
Japan's Nikkei dropped 0.8 per cent on a stronger yen.
Australian shares retreated 0.2 per cent and South Korea's KOSPI was flat.
On Friday, global stocks snapped a 10-day winning streak, taking a breather from a rally that had propelled them to a record high.
Wall Street indexes ended Friday flat to about 0.15 per cent lower, as disappointing earnings from General Electric and energy shares weighed.
European shares also closed lower, with Germany's DAX slumping 1.7 per cent, dragged lower by the euro's strength.
The euro was trading 0.1 per cent higher at US$1.1677 early on Monday, just a whisker below the two-year intraday high hit on Friday.
ECB President Mario Draghi's comments on Thursday, which conspicuously avoided citing the euro's recent strength as a problem, has emboldened traders convinced the central bank will begin tapering its bond-buying programme later this year.
"There has been very little backpedalling on the long euro storyline as dealers continue to place much emphasis on Draghi declining the opportunity to talk down the currency post-ECB minutes," Stephen Innes, head of Asia-Pacific trading at Oanda, wrote in a note.
"And factoring in the expanding US political sinkhole which is weighing on broader USD sentiment, it's unlikely the market has run out of steam," he wrote, adding he expects the euro to test the August 2015 high of US$1.1715 "sooner than later."
The dollar index, which tracks the greenback against a basket of trade-weighted peers, extended its run of declines. It touched 93.839 early on Monday, its lowest level since June 2016, and was last dealing at 93.844, little changed from Friday's close.
The dollar retreated 0.2 per cent to $110.89 yen in its fifth straight session of losses.
In commodities, oil remained in the doldrums after a consultant forecast a rise in Opec production for July despite the group's pledge to curb output, reviving concerns about oversupply.
Global benchmark Brent slipped 0.1 per cent to US$48.01 a barrel, after Friday's 2.5 per cent tumble.
US crude fell 0.1 per cent to US$45.71, extending Friday's 2.2 per cent slump.
Gold glittered on the dollar's weakness and decline in risk appetite. Spot gold inched up 0.1 per cent to US$1,256.26 an ounce, building on Friday's 0.8 per cent jump, and slightly below a one-month high hit earlier.