Reuters: US Dollar Report: GLOBAL MARKETS-World stock markets, dollar dip ahead of Fed; U.S. jobs data weak

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GLOBAL MARKETS-World stock markets, dollar dip ahead of Fed; U.S. jobs data weak May 1st 2013, 15:06 Wed May 1, 2013 11:06am EDT * MSCI world stock index slips; U.S. stocks open lower * Dollar down after U.S. private sector jobs data * Fed policy meeting ends later on Wednesday, ECB meets Thursday * Most markets in Asia, Europe shut for Labor Day By Caroline Valetkevitch NEW YORK, May 1 (Reuters) - World stock markets edged lower while the dollar slipped to a two-month low on Wednesday after weaker-than-expected U.S. private-sector job growth added to concerns about slow U.S. growth. The data reinforced expectations the Federal Reserve will maintain its stimulative monetary policy, which weighed on the dollar. The Fed, which is holding a two-day policy meeting, announces its decision at 2 p.m. EDT (1800 GMT) Oil prices fell sharply on worries about U.S. and Chinese economic growth. "We think the Fed will be as dovish as it can afford to be, and as such the softness of the dollar is justified and if anything, it could extend a bit further," said Adam Cole, global head of FX strategy at RBC Capital Markets. ADP's April jobs data before the Wall Street open came in well below expectations, with employers adding 119,000 positions, against forecasts for 150,000. The dollar index, which measures the U.S. currency's value against a basket of currencies, dropped as low as 81.331, its weakest since Feb. 25. It was last at 81.469, down 0.3 percent. U.S. stocks opened lower, pulling back from Tuesday's record intraday and closing highs on the S&P 500. Lower-than-expected sales from Merck & Co Inc dragged on the Dow, with Merck shares down 3.6 percent at $45.33. The Dow Jones industrial average was down 51.70 points, or 0.35 percent, at 14,788.10. The Standard & Poor's 500 Index was down 5.84 points, or 0.37 percent, at 1,591.73. The Nasdaq Composite Index was down 13.84 points, or 0.42 percent, at 3,314.95. MSCI's world equity index was down 0.3 percent, while the pan-European FTSEurofirst 300 index edged up 0.03 percent, with the Paris and Frankfurt stock markets closed for the May Day holiday, but London open. In the U.S. Treasury market, prices rose after the ADP report, which was the latest piece of evidence to suggest slower U.S. economic growth. The benchmark 10-year Treasury note was up 11/32 after the report, its yield easing to 1.63 percent from 1.68 percent late on Tuesday. The U.S. central bank is widely expected to maintain its monthly purchases of $85 billion in bonds as it looks to support an economic recovery that is nearly four years old but still too weak for the job market to truly heal. With inflation also slipping, Fed officials could again find themselves in the uncomfortable position of having to shift from talk of curbing stimulus to the possibility of doing more. On Thursday, the European Central Bank is expected to cut its main interest rate to a record low of 0.5 percent. UK MANUFACTURING LIFTS STERLING Economists are eyeing whether the ECB can do more. It lacks the aggressive policies many of its major peers are using and the mismatch in approaches, as well as the dollar's weakness, has kept upward pressure on the euro. With the May Day holiday curbing European trading, the euro rose 0.5 percent to $1.3226. It had earlier risen to $1.3242, according to Reuters data, its highest level since Feb. 25. Stronger-than-expected UK manufacturing figures lifted sterling. The Markit/CIPS UK Manufacturing Purchasing Managers' Index rose to 49.8 in April from an upwardly revised 48.6 in March, putting the sector within a whisker of the 50 level that separates growth from contraction. Economists had expected a much weaker reading of 48.5. Sterling rose to a 2-1/2 month high against the dollar of $1.5591. Oil prices slid as fresh concerns over economic growth in China and the United States and a build-up of U.S. crude inventories weakened the demand outlook. Brent crude futures were down $3.10 at $99.27 a barrel, falling below $100 for the first time since April 23. U.S. oil was down $2.95 at $90.51. Gold prices also were down sharply, with spot gold falling more than 2 percent to $1,442.94 on a broad commodities sell-off. Link this Share this Digg this Email Reprints

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