NEW YORK: The euro tumbled on Thursday, Feb 3 as odds for a near-term interest rate rise diminished, while violence in Egypt and upbeat economic data combined to push oil above $103 a barrel and copper to a record $10,000 a tonne.
Fighting between demonstrators and those loyal to Egyptian President Hosni Mubarak diminished risk appetite for stock investors who are weighing whether it is time to lock in profits after a 29-month rally.
Global food prices measured by the U.N. Food and Agriculture Organisation hit their highest level since records began in 1990. Rising food costs have been a key driver of the turmoil in Egypt and Tunisia that is threatening to spill over to other countries.
The European Central Bank held interest rates unchanged at 1 percent, as expected. However, ECB President Jean-Claude Trichet signaled that even with rising inflation, there is no threat to medium-term price stability.
"The underlying message is that there is no need for a rate hike any time soon," said Boris Schlossberg, director of currency research at GFT in New York.
The euro dropped 1.22 percent to $1.3634 and 0.90 percent to 111.59 against the yen. The greenback rose 0.34 percent against the yen to 81.83.
U.S. economic data, including better-than-expected weekly jobless claims, higher worker productivity and new orders received by U.S. factories helped drive copper and tin prices to record highs. A recent Reuters poll also points to a supply deficit in copper for the coming year.
After briefly touching $10,000 on the London Metal Exchange on Thursday, copper traded down to $9,907 a tonne at 1530 GMT, against $9,945 at Wednesday's close. Trading was muted due to the week-long Lunar New Year holiday in China.
Brent crude rose above $103 a barrel before dropping back to trade at $101.80, off 0.53 percent on the day. Crude traded in New York fell 0.56 percent to $90.35 a barrel.
In U.S. stocks, prices fell from the start, unable to capitalize on the positive economic data.
The Dow Jones industrial average fell 39.46 points, or 0.33 percent, to 12,002.51. The Standard & Poor's 500 Index lost 6.32 points, or 0.48 percent, to 1,297.71. The Nasdaq Composite Index dropped 16.08 points, or 0.58 percent, at 2,733.48.
"Egypt is slowly coming back to the front burner. People thought it could be resolved peacefully and quickly, but that doesn't seem to be the case. That's troubling from an equity perspective, since the country is important, especially for oil prices," said Nicholas Colas, chief market strategist at The Convergex Group in New York.
In Europe, the FTSEurofirst 300 index of leading shares fell 0.16 percent at 1,162.39 points.
The MSCI All-Country World index fell 0.56 percent from Wednesday's 29-month peak.
Benchmark 10-year U.S. Treasury yields rose to a seven week high of 3.55 percent. However, by mid-morning, the 10-year note fell 9/32 of a point in price, leaving the yield to 3.52 percent.
Spot gold prices fell $7.75, or 0.58 percent, to $1328.60 an ounce. - Reuters
Fighting between demonstrators and those loyal to Egyptian President Hosni Mubarak diminished risk appetite for stock investors who are weighing whether it is time to lock in profits after a 29-month rally.
Global food prices measured by the U.N. Food and Agriculture Organisation hit their highest level since records began in 1990. Rising food costs have been a key driver of the turmoil in Egypt and Tunisia that is threatening to spill over to other countries.
The European Central Bank held interest rates unchanged at 1 percent, as expected. However, ECB President Jean-Claude Trichet signaled that even with rising inflation, there is no threat to medium-term price stability.
"The underlying message is that there is no need for a rate hike any time soon," said Boris Schlossberg, director of currency research at GFT in New York.
The euro dropped 1.22 percent to $1.3634 and 0.90 percent to 111.59 against the yen. The greenback rose 0.34 percent against the yen to 81.83.
U.S. economic data, including better-than-expected weekly jobless claims, higher worker productivity and new orders received by U.S. factories helped drive copper and tin prices to record highs. A recent Reuters poll also points to a supply deficit in copper for the coming year.
After briefly touching $10,000 on the London Metal Exchange on Thursday, copper traded down to $9,907 a tonne at 1530 GMT, against $9,945 at Wednesday's close. Trading was muted due to the week-long Lunar New Year holiday in China.
Brent crude rose above $103 a barrel before dropping back to trade at $101.80, off 0.53 percent on the day. Crude traded in New York fell 0.56 percent to $90.35 a barrel.
In U.S. stocks, prices fell from the start, unable to capitalize on the positive economic data.
The Dow Jones industrial average fell 39.46 points, or 0.33 percent, to 12,002.51. The Standard & Poor's 500 Index lost 6.32 points, or 0.48 percent, to 1,297.71. The Nasdaq Composite Index dropped 16.08 points, or 0.58 percent, at 2,733.48.
"Egypt is slowly coming back to the front burner. People thought it could be resolved peacefully and quickly, but that doesn't seem to be the case. That's troubling from an equity perspective, since the country is important, especially for oil prices," said Nicholas Colas, chief market strategist at The Convergex Group in New York.
In Europe, the FTSEurofirst 300 index of leading shares fell 0.16 percent at 1,162.39 points.
The MSCI All-Country World index fell 0.56 percent from Wednesday's 29-month peak.
Benchmark 10-year U.S. Treasury yields rose to a seven week high of 3.55 percent. However, by mid-morning, the 10-year note fell 9/32 of a point in price, leaving the yield to 3.52 percent.
Spot gold prices fell $7.75, or 0.58 percent, to $1328.60 an ounce. - Reuters
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