GLOBAL MARKETS-Asian stocks make cautious gains, dollar languishes near two-year lows on Fed

* Asian stocks track Wall Street higher but sentiment
cautious
* Sentiment supported by ultra easy monetary policy
* Eyes on U.S. coronavirus relief package negotiations
* U.S. dollar languishes near two-year lows

By Swati Pandey
SYDNEY, July 30 (Reuters) - Asian stocks were boosted on
Thursday by the promise of ultra-easy monetary policy globally
as the U.S. Federal Reserve pledged to support the country's
virus-battered economy, though record-shattering COVID-19 cases
tempered gains.
In a mixed lead for Europe, futures for Eurostoxx 50
STXEc1 were slightly higher and those for Germany's Dax
FDXc1 were flat. London's FTSE futures FFIc1 rose 0.2% while
E-minis for the S&P 500 ESc1 were 0.2% lower.
Asian shares were mixed too with Japan's Nikkei .N225
giving up early gains to be down 0.26%, China's blue-chip index
was off 0.3% .CSI300 and Singapore shares were down 2.25%.
.STI
South Korea's KOSPI .KS11 added 0.2% while Australia's
main index .AXJO climbed 0.7% and Hong Kong's Hang Seng index
.HSI rose 0.4%.
That left MSCI's broadest index of Asia Pacific shares
outside of Japan .MIAPJ0000PUS up 0.3%.
A U.S. stalemate over the next fiscal stimulus package
together with a surge in novel coronavirus cases in the world's
largest economy had investors on the backfoot. Cases have also spiked this week in Asia with Australia,
India, Vietnam, and North Korea all on high alert. "There is no doubt that the Fed's large presence in markets
has provided risk assets with a backstop to stop a tightening in
financial conditions," said Perpetual analyst Matthew Sherwood.
On Wednesday, all Fed members voted as expected to leave the
target range for short-term rates between 0% and 0.25%, where it
has been since March 15 when the virus was beginning to hit the
nation. The unchanged policy setting together with a pledge the Fed
would use its "full range of tools" if needed boosted risk
appetite overnight with all three Wall Street indexes finishing
firmer. .IXIC .DJI .SPX .N
"But they (Fed) don't have any tools to engineer a recovery,
which means that fiscal policy will need to remain in place to
support household incomes, especially as unemployment could
increase in the months ahead as the true impact of the shock on
the labour market is revealed," Sherwood added.
Indeed, negotiations for a new coronavirus relief package in
the United States have become a pressing issue for investors.
U.S. President Donald Trump said on Wednesday that his
administration and Democrats in Congress were still "far apart"
on a new coronavirus relief bill. In currencies, the dollar index regained some lost ground
after crashing to 93.17, the weakest since June 2018. USD/
The dollar =USD has been tumbling on expectations the Fed
will continue its ultra loose monetary policy for years to come
and on speculation it will allow inflation to run higher than it
has previously indicated before raising interest rates.
The greenback weakness has supported the euro, which is on
course to post its biggest monthly gain in 10 years, having
risen about 5% so far this month. It was last down 0.3% at
$1.1754.
The risk-sensitive Australian dollar AUD=D3 slipped 0.5%
to $0.7148 after hitting its highest levels since April 2019.
In commodity markets, oil prices were weighed down by
concerns that surging coronavirus infections around the globe
could jeopardise a recovery in fuel demand. O/R
Brent crude futures LCOc1 were down 7 cents at $43.68 a
barrel. U.S. crude futures CLc1 eased 7 cents to $41.20. O/R
Spot gold XAU= was off 0.56% at $1,959.2 an ounce.