Euro hits 6-1/2 month peak vs yen, edges up on US dollar
The euro climbed to a 6-1/2-month high on the yen and rebounded versus the dollar in choppy trading on Wednesday as comments by Germany's chancellor spurred optimism European leaders will reach an agreement on Greek funding.
Europe's common currency dropped earlier after Greece's international lenders failed to reach agreement on releasing emergency aid as they haggled over how to reduce the country's
debt to a sustainable level.
The euro later trimmed losses after German Chancellor Angela Merkel said she saw chances of a deal at a meeting of European finance ministers on Monday.
The yen, meanwhile, fell across the board on weak Japanese export data and expectations of further monetary easing from the Bank of Japan. It fell to a 6-1/2 month low against the euro and
a 7-1/2 month trough versus the dollar.
The euro hit a peak of 105.82 yen <EURJPY=>, its highest since early May. In afternoon New York activity it traded slightly below the peak at 105.72 yen, up 1 percent on the day.
Against the dollar, the euro <EUR=> was up slightly at $1.2825, off a session low of $1.2733.
U.S. markets are closed on Thursday due to the U.S. Thanksgiving holiday.
Wall St gains after Gaza truce in light holiday trade
U.S. stocks rose on Wednesday after a ceasefire was declared to end the flare-up in violence between Israel and the Palestinians, though the lack of a deal to release emergency aid for Greece limited the market's advance.
Investors also remained anxious about the mandatory tax increases and spending cuts that would go into effect in the new year if a deal is not reached to prevent it - known as the "fiscal cliff" - though policymakers are not expected to get back to negotiations until after Thursday's Thanksgiving holiday.
Trading volume was light ahead of the holiday on Thursday, when the U.S. stock market will be closed. With less than an hour left to trade until the closing bell, about 3.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with year-to-date daily average volume of 6.5 billion shares. On Friday, the U.S. stock market will close early at 1 p.m. (1800 GMT).
A truce between Israel and Hamas gave stocks some support around midday after Egypt announced a ceasefire will come into effect later in the day.
Positive comments from U.S. politicians that they will work to find common ground have helped the S&P 500 recoup some of that loss in recent sessions.
The Dow Jones industrial average <.DJI> gained 49.60 points, or 0.39 percent, to 12,838.11. The Standard & Poor's 500 Index <.SPX> added 2.64 points, or 0.19 percent, to 1,390.45. The Nasdaq Composite Index <.IXIC> rose 10.10 points, or 0.35 percent, to 2,926.78.
Gold flat as Greek aid stalling, MidEast truce eyed
Gold was little changed on Wednesday after trading in a narrow range, caught between recession worries in Europe and the United States and safe-haven bids over concerns about violence in the Middle East.
Bullion ended near the top of an $11 daily range as the failure of international lenders to reach a deal to release emergency aid for Greece for a second week.
While gold is sometimes viewed as a safe haven in times of financial chaos, most investors used the metal as a hedge against inflation and central-bank money printing. Therefore, the disagreement on a Greek financial bailout decreased the metal's inflation-hedge appeal.
The metal was under pressure from data that showed U.S. consumer sentiment inched up, but appeared to be stalling after several months of improvement. Uncertainty also grew over a combination of tax hikes and spending cuts that may come into effect early next year in the United States.
Spot gold <XAU=> inched up 0.1 percent to $1,728.94 an ounce by 2:03 p.m. EST (1903 GMT).
U.S. COMEX gold futures <GCZ2> settled up $4.60 at $1,728.20, with trading volume over 150,000 lots in line with its 30-day average, preliminary Reuters data showed.
Oil Gains on Economic Optimism, Declining Fuel Stockpiles
Oil advanced for the third time in four days as U.S. inventories fell unexpectedly last week and fewer Americans filed applications for unemployment benefits.
Prices increased as stockpiles of crude and oil products dropped and jobless claims decreased by 41,000. Oil pared gains after Israel and Hamas agreed to a cease-fire, reducing concern that supplies would be disrupted.
Crude oil for January delivery gained 58 cents, or 0.7 percent, to $87.33 a barrel at 1:34 p.m. on the New York Mercantile Exchange. The price reached $87.89 in earlier trading.
Brent for January settlement advanced 88 cents, or 0.8 percent, to $110.71 a barrel on the ICE Futures Europe exchange in London.
Oil inventories decreased for the first time in three weeks to 374.5 million barrels, the Energy Department said. The median estimate of 11 analysts surveyed by Bloomberg was a gain of 1 million.
Gasoline inventories fell 1.55 million barrels to 200.4 million. Distillate supplies, which include heating oil and diesel, dropped 2.68 million to 112.8 million, the lowest level in more than four years.
Nikkei set to rise, may test a six-month high
Japan's Nikkei share average is set to open firmer on Thursday and is within sight of a six-month high on expectations a sharply weaker yen will boost earnings for exporters.
The dollar rose as high as 82.55 yen <JPY=>, its strongest level since early April, on a pledge by the main opposition Liberal Democratic Party, tipped to take power in an election next month, to push for further central bank easing. A softer yen allows exporters to earn more when they repatriate overseas earnings, and boosts their competitiveness.
The Nikkei <.N225> climbed 0.9 percent to end at a two-month high of 9,222.52 on Wednesday, and the broader Topix <.TOPX> advanced 0.7 percent to 767.01.
Nikkei futures in Chicago <0#NIY:> closed at 9,325, up from the close in Osaka <JNIc1> of 9,220.
Market players said the Nikkei was likely to trade between 9,200 to 9,350 on Thursday. If the index breaches the 9,300-line, it will be the first time since May.
Market analysts said investor sentiment remains upbeat, but markets are closely watching talks by U.S policymakers on how to avoid the U.S. "fiscal cliff," which has raised fears about the direction of the world's largest economy.
Seoul shares seen up on easing Gaza tension, firm Wall Street
Seoul shares are likely to regain some ground on Thursday, after a truce was declared between Israel and Palestinians in the Gaza strip, helping push up U.S. stocks overnight.
"We expect the KOSPI to rise modestly as the Middle East risk has abated with a ceasefire between Israel and Hamas," IBK Securities wrote in a morning note to investors.
The Korea Composite Stock Price Index (KOSPI) <.KS11> fell 0.3 percent to 1,884.04 points on Wednesday, snapping a two-day rally.
Wall Street gains were modest with trading subdued ahead of the Thanksgiving holiday. [.N]
Hong Kong shares seen higher, China flash PMI eyed
Hong Kong shares could start higher on Thursday, with a preliminary survey of November manufacturing activity in China expected at around 0145 GMT that could offer more clues on the state of the world's second-largest economy.
The U.S. Thanksgiving holiday could keep turnover in Hong Kong muted, with price movements on the day magnified by low volume.
On Wednesday, the Hang Seng Index <.HSI> climbed 1.4 percent, its best daily showing since Sept 14. The China Enterprises Index <.HSCE> of the top Chinese listings in Hong Kong jumped 1.7 percent.
Elsewhere in Asia, Japan's Nikkei <.N225> was up 0.9 percent, while South Korea's KOSPI <.KS11> was up 0.8 percent at 0053 GMT.
Source : Reuters
