Reports that China intends to curb excessive investment in a range of industries “hurts the strong global growth outlook and is one of the things moving the dollar today,” said Chuck Butler, president of Everbank World Markets in St. Louis.

Investors tend to buy the dollar and yen as safe havens or unwind trades in higher-yielding assets financed with the U.S. and Japanese currencies when recovery optimism fades.

Two reports offered some encouragement about the health of the U.S. economy. A rise of 9.6 percent in new homes sales in July was the fastest pace in nearly a year.

U.S. durable goods orders also rose in July, but a key measure of business demand — non-defense capital goods, excluding aircraft — fell, reminding investors the economy still faces huge challenges.

Analysts also said traders were using the mixed signals global growth signals to lock in profits booked earlier this week as foreign currencies rose against the dollar.

The euro was last down 0.5 percent at $1.4230 and 0.4 percent at 134.12 yen .

The dollar edged up 0.1 percent to 94.19 yen . Sterling fell to a six-week low against the dollar and was last off 0.8 percent to $1.6215 . The euro hit a 2-1/2-month high against the pound above 88 pence .

High-yielding and commodity-linked currencies such as the Australian dollar also fell after European equities snapped four straight sessions of gains led by commodity stocks.

Some analysts said the recent trend that’s seen the dollar weaken on good economic news may be starting to fade.

“The new home sales data was good, there’s no doubt about it. The question is, are signs that the U.S. economy is starting to bottom good for the U.S. dollar or for other currencies,” said David Watt, senior strategist at RBC Capital Markets in Toronto.

But he also said it will take more evidence that a U.S. recovery is on track to answer this question.

Earlier in the session, the euro got a brief boost after the Munich-based Ifo think-tank’s business climate index rose in July.

Andrew Wilkinson, market strategist at Interactive Brokers in Greenwich, Connecticut, argued that dollar weakness may be a “longer-run certainty,” but it does not seem to fit in the current environment when a global recovery remains shaky.

“We would not be surprised to see more investors throw in the towel on the euro in favor of a dollar that may yet push back below $1.40 before August is through,” he added.

Aug 26 (Reuters)

At 0827 GMT, the FTSEurofirst 300 index of top European shares was up 0.7 percent at 850.29 points after falling in the previous two sessions. The index, which slumped 45 percent in 2008, has jumped 31 percent since falling to a lifetime low in early March.

Elan rose 6.6 percent after the Sunday Times newspaper said that Novartis was in talks to buy parts of Elan, including its flagship multiple sclerosis products and its Alzheimer’s disease pipeline. Novartis was down 0.3 percent.

A spokeswoman for Elan said it did not comment on speculation. A spokesman for Novartis declined to comment.

Novo Nordisk gained 4.4 percent, clawing back most of last week’s losses, on expectations that sales of its modern insulins will benefit from concerns over the safety of Sanofi-Aventis’s rival product Lantus.

Sanofi rose more than 1 percent, levelling out after plunging last week on concerns about imminent new research findings on Lantus and cancer. Details of four European trials highlighting a possible link were made public after the market close on Friday.

But despite Monday’s gains, the European index is on track to close the month in a negative territory after advancing in the previous three months.

“It’s quite clear that we have lost momentum over the last week or so. The strong rally that we saw in cyclicals through the early part of the second quarter has started to fade,” said Darren Winder, head of macro and strategy research at Cazenove.

“But I don’t think this is the beginning of a downward trend. The markets are basically in a trading range at the moment and are looking for signs of economic recovery. And those signs are not going to be there in a very visible way until the autumn.”

UBS fell 1.7 percent. The bank is to pay 3 billion to 5 billion Swiss francs ($2.77-$4.62 billion) in the next two weeks to settle a U.S. tax probe into the bank, Swiss newspaper Sonntag reported.

Other banks were broadly higher. Barclays , Lloyds , Royal Bank of Scotland and Societe Generale were up 0.3-3.2 percent.

Energy stocks were among top gainers on the index as they tracked firmer crude oil prices . BP , Royal Dutch Shell , BG Group , Repsol , Total and StatoilHydro added 0.6-1.7 percent.

Miners got strength from a 1.2 percent rise in copper prices and a 1.3 percent increase in nickel prices. BHP Billiton , Antofagasta , Rio Tinto , Xstrata and Eurasian Natural Resources rose 0.3-2.2 percent.

Anglo American was up 0.4 percent. The Sunday Telegraph reported that the miner was building its defences against a 41 billion pound ($67.74 billion) merger approach from Xstrata by plotting talks about a major Chinese investment.

Across Europe, UK’s FTSE 100 index, Germany’s DAX  and France’s CAC 40  were up 0.5-0.6 percent.

LONDON, June 29 (Reuters)

Nigeria’s main militant group said on Sunday it had attacked three oil installations belonging to Royal Dutch Shellin the Niger Delta, widening a month-old offensive against Africa’s biggest energy industry.

“We’ve got weakening stock markets and the dollar is starting to strengthen,” said Rob Montefusco, a trader at Sucden Financial. “Also technically, it all broke down on Friday.”

U.S. crude for July , which expires later on Monday, fell $2.10 to $67.45 by 1414 GMT. It traded as low as $67.05 intraday, the lowest price since June 8. Brent crude slipped $1.88 to $67.31.

The World Bank warned on Monday prospects for the global economy remained “unusually uncertain” despite recent signs of improvement in parts of the world and cut its 2009 growth forecasts for most economies.

Wall Street opened lower, European stocks lost ground and the dollar rose against a basket of other major currencies. A stronger dollar can limit the appeal of oil and commodities to investors.

Chart patterns are also pointing lower for crude. Both Brent and U.S. crude closed below the $70 mark on Friday, a bearish technical development. Even so, crude has more than doubled from a low of $32.40 in December.

Rebels in Nigeria have been carrying out attacks on the oil industry for years in what they claim is a struggle for a fairer share of the region’s energy wealth.

Also supporting the market was data showing China’s implied oil demand rose 6 percent in May over a year ago, its fastest growth since August 2008. China is the world’s second largest user of oil.

In the Middle East, Iranian opposition leader Mirhossein Mousavi urged supporters to continue protests over the re-election of President Mahmoud Ahmadinejad, in a direct challenge to the Islamic Republic’s leadership.

Some analysts say the political turmoil in Iran, a major oil exporter, so far is of limited significance for the markets due to high levels of unused production capacity and inventories. Others see it as supportive.

“The deterioration in the Iranian situation should prevent a sharper sell-off,” said Edward Meir, analyst at MF Global.

Crude oil speculators on the New York Mercantile Exchange slashed their net long positions nearly in half in the week to June 16, data showed on Friday. Long positions are bets that prices will rise.

LONDON, June 22 (Reuters)

Oil prices had surged nearly 9 percent in the previous session due to a surprise drop in U.S. crude stocks, which may indicate a recovery in demand in the top energy consumer.

But data showing euro zone gross domestic product (GDP) fell by a record 1.5 percent in the last quarter of 2008, as exports and household demand collapsed, forced traders to refocus on falling global consumption.

“The economic outlook is still pretty grim and I don’t think these bits of bullish data are enough to counteract this in the short-term,” Christopher Bellew at Bache Commodities said.

U.S. crude slipped $1.51 to $43.87 a barrel by 1224 GMT, after earlier hitting a month high of $45.70, while London Brent crude fell $1.63 to $44.49.

Oil prices gained some support from remarks by China’s Premier Wen Jiabao on Thursday that the No. 2 oil consumer would achieve 8 percent growth this year — a level considered key to maintain employment growth — despite the deepening global recession.

China’s gauge of the health of its manufacturing sector, the purchasing managers’ index (PMI), gained for the third month in a row in February, suggesting the domestic economy, and oil demand, could be recovering.

The U.S. Energy Information Administration said crude stocks declined by 700,000 barrels last week, while gasoline demand rose 2.2 percent from a year ago, as lower prices boosted consumption.

Traders were also eyeing the release of a raft of economic data in the U.S., including jobless benefit claims and January factory orders, for clues on the health of the world’s largest economy.

TO CUT OR NOT TO CUT?

Oil prices have traded in a narrow band near $40 since mid-December, caught between slumping demand and the possibilty of further OPEC output cuts when the group meets on March 15.

“The market is still rangebound as any bullish news has been kept in check by the global economic meltdown,” Bank of Ireland analyst Paul Harris said.

“But the next OPEC meeting is coming into focus, and they will probably have to act to convince the market they are really serious about continuing to restrict production.”

OPEC planned to lower oil output by 4.2 million barrels per day from production levels in September, in a bid to boost falling prices, and a Reuters survey found OPEC members had already met at least 81 percent of their target.

Angola, which currently holds the presidency of the 12-member group, will not advocate further production cuts when the group meets on March 15 in Vienna, OPEC sources said on Wednesday.

But Venezuela, Algeria and Libya have raised the possibility of a further cut.

March 5 (Reuters)

Trading is expected to be muted ahead of the interest rate announcement of the European Central Bank on Thursday, traders said. The ECB is widely expected to cut rates by 50 basis points.

Spot gold was at $812.00/814.00 an ounce at 1523 GMT, down from $821.05 in New York late on Tuesday. It touched a high of $828.65 earlier in the session, but slipped as the euro retreated and European equities and base metals turned negative.

U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange fell $8.10 to $812.60 an ounce.

“Gold has fallen as the dollar has increased on a flight to safety after very bad retail sales numbers,” said Calyon metals analyst Robin Bhar.

“People were calling for a pretty bad retail sales number as it stood, but this was even worse than most people had feared,” he said.

December retail sales numbers released earlier on Wednesday showed total sales down 2.7 percent last month, against expectations for a 1.2 percent fall.

The U.S. currency extended gains against the euro as investors spooked by the outlook for the global economy bought into the dollar as a haven from risk.

While in the longer run risk aversion is also likely to benefit gold, in the short term currency moves will have more of an impact on the precious metal, analysts said.

The single currency also came under pressure after Standard and Poor’s cut its credit ratings on Greece’s sovereign debt.

Bullion is often bought as an alternative investment to the dollar and tends to move in the opposite direction to it.

All eyes are now on the interest rates decision of the ECB on Thursday, which will have a significant impact on the foreign exchange markets, and consequently on gold.

“Everyone is in wait-and-see mode for the ECB,” said Simon Weeks, director of precious metals at the Bank of Nova Scotia.

Data released on Wednesday showed the German economy contracted sharply in the final quarter of 2008 and euro zone industrial production plunged for the seventh month running in November.

The data suggested the recession is worsening and strengthens views the ECB will cut rates deeply on Thursday.

CRUDE SLIPS

Oil prices also slipped, giving up earlier gains, on the spate of poor economic data.

Gold typically moves in line with crude prices, both because it is bought as a hedge against oil-led inflation, and as crude can indicate interest in commodities as an asset class.

In Asia, jewellers are buying up gold bars ahead of the Lunar New Year on Jan 26, dealers said. Premiums for gold bars were steady at between 10 and 20 U.S. cents to spot London prices in Hong Kong.

“With Chinese New Year approaching it will be very interesting to hear how sales have gone and whether the strong purchases continue after the New Year holidays,” UBS strategist John Reade said in a note.

Jewellery demand in the world’s largest bullion market, India, has however been lacklustre in recent weeks, as buyers await lower prices.

Interest in investment products backed by physical gold, such as ETFs, is also healthy. Bullion holdings of the world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust , remain near record levels.

Among other precious metals, spot platinum edged down to $930/940 an ounce from $941, while palladium was quoted at $178/183 an ounce against $182.

Spot silver was at $10.41/10.49 against $10.72.

LONDON, Jan 14 (Reuters)

News about a planned U.S. stimulus package helped pull investors into the dollar on Monday but U.S. Treasury prices slumped on fears a price bubble is about to pop in the face of a massive wave of fresh debt.

European equities advanced for the fifth session in a row, spurred by gains in shares of oil companies on the back of rising crude prices. U.S. stocks were mostly lower as investors took profits on the rally that was racked up in thin trading last week.

Oil prices hit a three-week high as Israel’s deepening incursion into Gaza and a Russian gas dispute heightened fears about supplies.

Prospects for a swelling supply of government debt drove U.S. and euro-zone prices down. The U.S. Treasury said it would sell $16 billion of reopened 10-year notes and $30 billion in three-year notes this week.

While the issuance was broadly in line with market forecasts, it underscored this year’s looming surge of debt that will to fund government efforts to rescue the financial system.

U.S. President-elect Barack Obama plans $310 billion in tax cuts as part of a rescue package of up to $775 billion, senior Democratic aides said Sunday. German Chancellor Angela Merkel met her Social Democrat (SPD) coalition partners to discuss a second fiscal stimulus deal worth up to 50 billion euros ($68 billion).

The 30-year Treasury bond fell nearly three full points in price, pushing its yield up to 2.92 percent, up from a record low near 2.52 percent in December.

“The back-up in yields shows a growing sentiment toward questioning the lower rate environment we are in right now,” said George Goncalves, chief Treasury/TIPS and agency strategist with Morgan Stanley in New York.

The euro hit three-week lows versus the dollar, with weaker-than-expected Italian and Spanish inflation data and tax cuts in Germany expected to pressure the European Central Bank to soon cut rates further.

U.S. stocks fell as investors took profits following last week’s sharp gains.

“Right now we’re just watching and waiting to see if there is any news from the new administration and what type of news it will be,” said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. “We got a little bit of profit taking here,” he added.

Shares of Apple Inc rose after chief executive Steve Jobs wrote a letter aimed at dispelling investor concerns about his recent weight loss. Shares of the iPod maker rose 4.4 percent to $94.75 in early afternoon trade.

Before 1 p.m., the Dow Jones industrial average was down 79.09 points, or 0.88 percent, at 8,955.60. The Standard & Poor’s 500 Index was down 3.27 points, or 0.35 percent, at 928.53. The Nasdaq Composite Index was down 8.52 points, or 0.52 percent, at 1,623.69.

European equity markets were buoyed by the anticipation of further fiscal stimulus, drawing flows away from the safer-haven of government bonds.

The FTSEurofirst 300 index of top European shares ended 1.9 percent higher at 873.01 points.

The telecommunications sector was one of the biggest gainers on the index on the first full day of 2009 trading for many, with Swisscom (SCMWY) rising 5.2 percent, Cable and Wireless adding 4.6 percent, Vodafone (VOD) up 4.3 percent and Portugal Telecom (PT) rising 4.6 percent.

Sharp losses for the euro, which was down 2.28 percent at $1.3559, also spread to euro/sterling, taking it to 0.9278, well away from record lows for the pound last week and easing momentum towards parity.

The dollar rose against a basket of major trading-partner currencies, with the U.S. Dollar Index up 1.74 percent at 82.923. Against the yen, the dollar rose 1.31 percent at 93.43 from a previous session close of 92.220.

Longer maturity government debt fell, but shorter-term debt was little changed to higher. The benchmark 10-year U.S. Treasury note fell 34/32 in price to yield 2.47 percent, and the 30-year U.S. Treasury bond fell 102/32 in price to yield 2.94 percent.

Oil rose, and has gained more than 35 percent since Israel launched its attack on Gaza on Dec. 27, increasing concerns about the supply of crude from the Middle East.

U.S. light sweet crude oil rose $1.11 to $47.45 a barrel.

U.S. gold futures dropped, breaking below $850 an ounce, as investors took profits on the back of a dollar rally and signs of slowing physical demand.

Spot gold prices fell $22.45 to $852.60 an ounce.

Asian stocks rose to a two-month high on hopes massive government spending programs will revive a global economic recovery later this year.

The MSCI index of Asia-Pacific stocks outside Japan climbed 1.6 percent to a two-month peak, while Japan’s Nikkei average gained 2.1 percent in a shortened session to reach a two-month high.

NEW YORK, Jan 5 (Reuters)