Reuters: US Dollar Report: GLOBAL MARKETS-Oil falls as Isaac spares production, stocks flat

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GLOBAL MARKETS-Oil falls as Isaac spares production, stocks flat Aug 29th 2012, 15:57 Wed Aug 29, 2012 11:57am EDT * Euro slips, still near last week's high vs USD * Upcoming Jackson Hole Fed chairman speech in focus By Rodrigo Campos NEW YORK, Aug 29 (Reuters) - U.S. crude oil prices fell on W ednesday as Hurricane Isaac left Gulf Coast oil production largely unscathed, while global stocks were in a tight range as traders looked ahead to a meeting of central bankers on Friday. U.S. stocks were up slightly in a third straight day of likely low volume as traders awaited Federal Reserve Chairman Ben Bernanke's speech in Jackson Hole, Wyoming, on Friday to assess the likelihood of further economic stimulus. Gross domestic product data showed the world's biggest economy grew at a 1.7 percent annual pace in the second quarter, a slightly faster rate than the 1.5 percent initially reported. However, the pace of growth remained too slow to rule out further monetary easing from the Fed. U.S. stocks have been supported recently by expectations the Fed will pump more cash into an economy whose recovery has stalled. Speculation on further easing had been dampened by a pick-up in job growth and a rebound in retail sales in July, but other data on business spending and inflation supported more action. "Investors are unwilling to do anything big with potentially major news events like the Fed hitting in the next couple of days," said Mike Gibbs, chief market strategist at Morgan Keegan in Memphis, Tennessee. "Everyone is in a wait-and-see mode. The market is extremely quiet and boring, and volumes are pretty much dead." The Dow Jones industrial average edged up 5.08 points, or 0.04 percent, at 13,108.07. The Standard & Poor's 500 Index was up 1.34 points, or 0.10 percent, at 1,410.64. The Nasdaq Composite Index was down 0.43 points, or 0.01 percent, at 3,076.71. An MSCI gauge of global shares dipped 0.06 percent and a European benchmark provisionally closed down 0.24 percent. Hurricane Isaac left U.S. Gulf Coast oil production facilities without significant damage and U.S. light crude was down 1.1 percent at $95.25 per barrel. U.S. crude was further weighed by data showing inventories rose last week, against expectations they would be down. Oil had risen on Tuesday as production dropped by more than 90 percent as coastal refineries shut down in a precautionary move ahead of the approaching hurricane. Brent crude futures were off 0.1 percent at $112.50. The euro declined against the U.S. dollar, reversing some of the previous session's gains, though losses were limited by optimism the European Central Bank will act decisively to tackle the debt crisis. The ECB will meet on September 6 and is seen close to producing a decisive bond-buying plan to curb high Spanish and Italian borrowing costs and ease Europe's three-year-old debt crisis. ECB chief Mario Draghi said in a newspaper opinion piece on Wednesday the bank needed to employ "exceptional measures," bolstering speculation of imminent action. But with the risk of disappointment from the Fed and ECB high, investors were adopting a cautious approach. "Markets are quiet with a slight bias to shed risk," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto. "Paralysis ahead of Jackson Hole and extreme event risk in early September are the key themes." The euro was down 0.18 percent at $1.2542, near last week's high of $1.2589, the highest since early July. Prices on medium- and long-dated U.S. Treasuries slipped after data showed pending U.S. home sales rose to their highest level in more than two years, reinforcing the view the housing recovery is gaining traction. The benchmark 10-year U.S. Treasury note was down 10/32, with the yield at 1.6694 percent. Link this Share this Digg this Email Reprints

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