Reuters: US Dollar Report: GLOBAL MARKETS-Fed easing hopes lift shares, weigh on dollar

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GLOBAL MARKETS-Fed easing hopes lift shares, weigh on dollar Aug 23rd 2012, 09:27 Tweet Share this Email Print Related Topics Stocks » Currencies » Markets » Thu Aug 23, 2012 3:31am EDT * Fed minutes fuel expectations of US stimulus * European shares follow U.S., Asia to open higher * Euro hits fresh 7-week high vs dollar * China HSBC PMI shrank at fastest pace in 9 months LONDON, Aug 23 (Reuters) - Signals from the U.S. Federal Reserve that another dose of stimulus measures could come "fairly soon" lifted global shares on Thursday and pushed the dollar to a two-month low, outweighing poor economic data from China. European shares, which are up over 15 percent since June and have been driving the steady 11.5 percent rise in global stocks, rose 0.5 percent in early trading. Indexes in London, Frankfurt and Paris were all higher. The euro, which has been boosted in recent weeks by hopes that a new bond buying-led plan being drawn up by the European Central Bank will overcome the currency bloc's debt troubles, was at a seven-week high against the dollar at $1.2536. The dollar sank to a two-month low versus a broader basket of currencies. Behind the move was the Federal Reserve's signal on Wednesday that more policy easing is likely to be on the way, a move that will pump more dollars into the financial system. Minutes from the U.S. central bank's meeting earlier in the month said: "Many (Fed) members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery." "The market seems more interested in more prospects of stimulus from the Fed than worries over the euro crisis. In the short term, the market could get back up to the highs which we've seen in the last few weeks," said Darren Easton, director of trading at London-based Logic Investments. The markets also seemed more interested in Fed signals than the fact that Chinese manufacturing PMI data hit their lowest levels since November as new export orders slumped and the stock of unsold goods rose. Germany will release updated second quarter GDP numbers later, while euro zone PMI data will give the latest reading of economic confidence in the currency bloc. Meetings between Greece and key euro zone leaders will continue, with Greece's prime minister heading to Berlin to see German Chancellor Angela Merkel on Friday and French President Francois Hollande on Saturday. European bond markets were choppy in early trading. German government bond futures opened in demand, up 13 ticks, tracking the move in U.S. bonds. Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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