NEW YORK: World stocks and the U.S. dollar wavered on Friday, Oct 22 before a meeting of the Group of 20 leading economies that is keeping markets choppy and traders skittish as they take profits after this week's run-up.
Uncertainty about the outcome of the meeting of G20 finance ministers who seek a common path to manage global trade prompted some investors to moderate their dollar-selling until the gathering in South Korea ends this weekend.
Wall Street stocks were little changed and European shares edged lower from six-month highs as the dollar rose slightly and was on track to snap a five-week losing streak against major currencies.
U.S. Treasury Secretary Timothy Geithner said in a letter to fellow G20 finance chiefs that countries should refrain from currency policies designed to gain a competitive edge and should aim instead to contain trade imbalances.
Canada said it supported the proposals. However, developing economies, such as China, may cool to the idea of letting their currencies strengthen if the U.S. Federal Reserve embarks on an expected new program to boost money supply.
"It's unlikely the G20 meeting will produce any substantial clarity regarding the direction of currencies. It will not prevent the U.S. Federal Reserve from announcing a new round of quantitative easing," said UniCredit analyst Tammo Greetfeld.
While traders would not rule out another lurch lower for the dollar, which fell about 7 percent against currencies over the past month, they said large bets against the U.S. currency pointed to a correction.
The dollar rose slightly against major currencies, with the U.S. Dollar Index up 0.14 percent at 77.538 and is up about 0.4 percent this week, its first weekly gain since mid-September.
The euro was barely changed against the dollar at $1.3915, and against the Japanese yen, the dollar was up 0.01 percent at 81.35.
"The dollar has fallen quite rapidly over the last month or so and positions are somewhat extended. We saw the tide turning a bit this week," said Nick Bennenbroek, currency strategist at Wells Fargo in New York.
The Dow was down but the Nasdaq and S&P were slightly higher.
The Dow Jones industrial average was down 21.27 points, or 0.19 percent, at 11,125.30. The Standard & Poor's 500 Index was up 0.53 points, or 0.04 percent, at 1,180.79. The Nasdaq Composite Index was up 8.00 points, or 0.33 percent, at 2,467.67.
Oil prices rose above $81 a barrel as positive German data stoked commodities buying.
U.S. crude futures were up 56 cents at $81.12 a barrel, while ICE Brent in London rose 57 cents to $82.40 a barrel.
U.S. government debt prices fell slightly.
The benchmark 10-year U.S. Treasury note was down 2/32, with the yield at 2.5487 percent.
Gold prices steadied, recovering much of their losses that took them to 2-1/2 week lows earlier in the session.
Spot gold prices rose slightly to $1,323.35 an ounce.
Gold investors were wary whether any clear agreement to tackle currency imbalances would be reached at the G20 meeting.
Japan's Nikkei share average edged up 0.4 percent in thin trade, while the MSCI Asia Pacific ex-Japan index was largely unchanged on the day. - Reuters
Uncertainty about the outcome of the meeting of G20 finance ministers who seek a common path to manage global trade prompted some investors to moderate their dollar-selling until the gathering in South Korea ends this weekend.
Wall Street stocks were little changed and European shares edged lower from six-month highs as the dollar rose slightly and was on track to snap a five-week losing streak against major currencies.
U.S. Treasury Secretary Timothy Geithner said in a letter to fellow G20 finance chiefs that countries should refrain from currency policies designed to gain a competitive edge and should aim instead to contain trade imbalances.
Canada said it supported the proposals. However, developing economies, such as China, may cool to the idea of letting their currencies strengthen if the U.S. Federal Reserve embarks on an expected new program to boost money supply.
"It's unlikely the G20 meeting will produce any substantial clarity regarding the direction of currencies. It will not prevent the U.S. Federal Reserve from announcing a new round of quantitative easing," said UniCredit analyst Tammo Greetfeld.
While traders would not rule out another lurch lower for the dollar, which fell about 7 percent against currencies over the past month, they said large bets against the U.S. currency pointed to a correction.
The dollar rose slightly against major currencies, with the U.S. Dollar Index up 0.14 percent at 77.538 and is up about 0.4 percent this week, its first weekly gain since mid-September.
The euro was barely changed against the dollar at $1.3915, and against the Japanese yen, the dollar was up 0.01 percent at 81.35.
"The dollar has fallen quite rapidly over the last month or so and positions are somewhat extended. We saw the tide turning a bit this week," said Nick Bennenbroek, currency strategist at Wells Fargo in New York.
The Dow was down but the Nasdaq and S&P were slightly higher.
The Dow Jones industrial average was down 21.27 points, or 0.19 percent, at 11,125.30. The Standard & Poor's 500 Index was up 0.53 points, or 0.04 percent, at 1,180.79. The Nasdaq Composite Index was up 8.00 points, or 0.33 percent, at 2,467.67.
Oil prices rose above $81 a barrel as positive German data stoked commodities buying.
U.S. crude futures were up 56 cents at $81.12 a barrel, while ICE Brent in London rose 57 cents to $82.40 a barrel.
U.S. government debt prices fell slightly.
The benchmark 10-year U.S. Treasury note was down 2/32, with the yield at 2.5487 percent.
Gold prices steadied, recovering much of their losses that took them to 2-1/2 week lows earlier in the session.
Spot gold prices rose slightly to $1,323.35 an ounce.
Gold investors were wary whether any clear agreement to tackle currency imbalances would be reached at the G20 meeting.
Japan's Nikkei share average edged up 0.4 percent in thin trade, while the MSCI Asia Pacific ex-Japan index was largely unchanged on the day. - Reuters
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