Asian shares were subdued in early trade on Friday, but still on track for a ste

ep weekly loss in the wake of China's shock currency devaluation earlier in the
week.
Crude oil futures remained under pressure, plunging to 6-1/2-year lows after dat
a revealed a big rise in U.S. stockpiles, fuelling fears of a growing global glu
t.
MSCI's broadest index of Asia-Pacific shares outside Japan was down about 0.1 pe
rcent, poised to end the week down 2.6 percent.
Japan's Nikkei stock index fell 0.3 percent, and was down about 0.9 percent for
the week.
Investors awaited Friday's yuan fixing to see if China's central bank would set
its official guidance rate lower for a fourth day. The People's Bank of China (P
BOC) set its rate nearly 2 percent lower on Tuesday, a move it said was aimed at
making its foreign exchange system more responsive to market forces.
The PBOC reassured investors on Thursday, saying there was no reason for the yua
n to fall further given the country's strong economic fundamentals, helping to c
alm investors who pared holdings of risk assets for fear of a currency war.
The dollar's moves in U.S. trading were subdued, which meant the PBOC could set
Friday's reference below Thursday's 6.4010, at around 6.39, said Sean Callow, se
nior currency strategist at Westpac.
"While this would simply be a stable outcome - fully consistent with how the PBO
C has explained the 'new system - it would generate a wave of headlines about a
stronger yuan and should support risk appetite," Callow said in a note.
A midpoint in the 6.40-6.41 area might be unsettling for risk assets, he said.
The dollar was steady on its Japanese counterpart at 124.41. The euro edged up a
bout 0.1 percent to $1.1158, moving back toward a one-month peak of $1.1215 scal
ed on Wednesday.
The dollar came under pressure this week as the market instability caused by Chi
na's devaluation curbed expectations that the U.S. Federal Reserve's long-awaite
d interest rate increase would come as early as its Sept. 16-17 meeting.
But strong U.S. retail sales data on Thursday provided evidence in support of vi
ews that the Fed is on track to hike.
U.S. retail sales rose in July and were revised up for June, while the trend of
weekly jobless claims pointed to a tightening job market.
In commodities trading, crude oil futures extended sharp losses that pushed oil
prices to levels not seen since early 2009, when the financial crisis was wreaki
ng havoc on markets.
U.S. crude settled down 3 percent at a new 6-1/2-year low as a big rise in U.S.
stockpiles intensified worries over a growing global glut.
U.S. crude oil was down 0.4 percent at $42.07 a barrel in early Asia trade, whil
e Brent slipped 0.2 percent to $49.11, ahead of Friday's expiry of its front-mon
th contract.