Reuters: US Dollar Report: GLOBAL MARKETS-U.S. stocks dip, euro falls on weak data

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GLOBAL MARKETS-U.S. stocks dip, euro falls on weak data May 15th 2013, 14:59 Wed May 15, 2013 10:59am EDT * Disappointing U.S., euro zone data fuel hopes of stimulus * U.S., German bond yields rise on weak regional data * Dollar rises against most currencies except yen * Oil, gold stuck in losing streaks due to stronger greenback By Richard Leong NEW YORK, May 15 (Reuters) - A batch of disappointing economic reports knocked U.S. stock prices from their record highs on Wednesday, while evidence that Europe was stuck in recession pushed the euro to a six-week low against the dollar. The weak figures on U.S. business activity and data showing the euro zone economy contracted for a sixth consecutive quarter in January-to-March, however, pared bets the U.S. Federal Reserve will reduce its bond purchases any time soon and bolstered the chance the European Central Bank might cut interest rates again later this year, analysts said. This view the Fed and ECB will continue to support their economies with low interest rates and floods of cash mitigated the losses in U.S. stocks prices and helped lift European shares to fresh multi-year highs. It also revived safe-haven bids for U.S. Treasuries and German Bunds. "The market is driven by one thing: the massive liquidity injected by central banks. With bond yields at such levels, equities seem to be the only interesting asset class," said Thierry Jabes, strategist at 360 Asset Managers in Paris, which manages 180 million euros ($232 million). The bleak news on the euro zone economy spurred worries about falling energy demand and pushed Brent futures in London below $102 a barrel. As the euro weakened, the dollar receded from its 4-1/2-year high against the yen but held firm against other major currencies. The dollar index touched its highest level since July. The strengthening dollar further reduced investor holdings in gold whose prices fell for a fifth straight session to a three-week low. In morning trading, the Dow Jones industrial average was down 5.08 points, or 0.03 percent, at 15,210.17. The Standard & Poor's 500 Index was down 0.59 points, or 0.04 percent, at 1,649.75. The Nasdaq Composite Index was up 1.08 points, or 0.03 percent, at 3,463.69. The Dow and S&P 500 reached record highs on Tuesday. Despite their modest dips, both indices were still up about 16 percent on the year so far. Europe's broad FTSEurofirst 300 index of top company shares was up 0.65 percent at 1,244.71 points, a level not seen since mid-2008. Gains in European and Japanese shares kept the MSCI global index in the black. It was last up 0.04 percent on the day at 376.43, the highest since June 2008. In the bond market, the yield on benchmark U.S. 10-year Treasury notes fell nearly 5 basis points to 1.935 percent after touching the highest level in seven weeks on Thursday. German Bund futures were up 13 basis points at 144.86. At the end of the sovereign debt spectrum, 10-year Greek bond prices surged after Fitch Ratings upgraded the country's junk credit ratings, saying reforms have reduced Greece's risk of a euro zone exit. Much attention was also on Italy getting ready to launch a new 30-year bond to follow the successful 10-year debt sale by Spain on Tuesday. Italy, euro zone's third-biggest economy, received over 10 billion euros ($13 billion) of orders for the new bond. While investor appetite for the debt of these struggling euro zone members was encouraging, the 17-member block has remained in a collective doldrums which has been a drag on its two biggest members - Germany and France. The euro was down almost 0.4 percent at $1.2869 and off 0.7 percent against yen at 131.35 yen. On the other hand, the dollar steamed ahead against most other major currencies with the exception of the yen. The dollar index rose 0.3 percent to 83.861 even though the greenback slipped 0.2 percent against the Japanese currency. The strengthening dollar continued to hurt commodities prices, as it has made dollar-denominated commodities such as oil more expensive for holders of other currencies. In London, benchmark Brent crude fell 91 cents to $101.69 a barrel, while U.S. oil futures lost $1.69 to $92.52 , declining for a fifth straight session and matching a similar losing streak in December. Gold was trading around three-week lows at $1,404.94 an ounce and stretching its losses into a fifth session. Link this Share this Digg this Email Reprints

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