GLOBAL MARKETS-Dollar, stocks rise as China data spurs optimism

Published 09/10/2010, 12:48 PM
Updated 09/10/2010, 12:52 PM
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* Dollar, euro gain on strong import data from China

* U.S. stocks rise as fears of double-dip recession ebb

* Crude oil rises to more than $76 on U.S. supply outage

* China data, Dubai World deal support risk appetite (Adds close of European markets)

By Herbert Lash

NEW YORK, Sept 10 (Reuters) - The euro and U.S. dollar rose on Friday after strong import data from China boosted rising optimism about global growth, while stocks edged higher, buoyed by the economic outlook and a jump in oil prices.

The euro gained about 1 percent versus the Swiss franc as the safe-haven currency came under selling pressure from better risk appetite. The dollar rose against the Japanese yen, which remained near a 15-year high touched earlier this week. For details see: [ID:nN10249071]

Chinese imports jumped in August, a sign of potential stronger domestic demand in an economy that is a major driver of global growth. [ID:nTOE689024].

Imports rose 35.2 percent from a year earlier, easily beating July's 22.7 percent rise and market forecasts of a 26.1 percent gain, General Administration of Customs data showed.

Risk aversion also eased on news that Dubai World [DBWLD.UL] had reached a deal to restructure its liabilities, helping ease renewed fears about Dubai's debt woes. [ID:nLDE6890IT].

"There has been strong risk assumption on the China data overnight," said John Doyle, senior currency strategist at Tempus Consulting in Washington.

The euro was up 0.27 percent at $1.2728, while the dollar was up 0.37 percent against the yen at 84.11.

Global stocks reversed early losses to trade slightly higher as U.S. stocks headed for their sixth up day in the last seven sessions even as they pared some of their gains.

MSCI's all-country world equity index <.MIWD00000PUS> rose 0.1 percent, aided by rising U.S. stocks.

Energy shares advanced as crude futures rose above $76 per barrel after the forced shutdown of the biggest pipeline supplying Canadian oil to refineries in the U.S. Midwest and to a key storage hub in Oklahoma. [ID:nSGE689037].

The PHLX oil services sector index <.OSX> gained 2.6 percent.

"There's been a resurgence in optimism about the economy, and that's directly linked to oil demand," said Peter Jankovskis co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

Worries in August that the U.S. economy was poised to slip back into recession have waned as economic data, while still sluggish, has beat consensus forecasts since September began.

The Dow Jones industrial average <.DJI> was up 20.58 points, or 0.20 percent, at 10,435.82. The Standard & Poor's 500 Index <.SPX> was up 2.84 points, or 0.26 percent, at 1,107.02. The Nasdaq Composite Index <.IXIC> was down 2.88 points, or 0.13 percent, at 2,233.32.

European shares eased from four-month highs as bank shares slipped ahead of the Basel Committee meeting and on a report that Deutsche Bank plans to raise up to 9 billion euros ($11.4 billion) in a stock offering. [ID:nLDE6891M1]

The pan-European FTSEurofirst 300 <.FTEU3> index fell 0.1 percent to 1,081.02 points, retreating from its highest closing level since late April on Thursday.

Deutsche Bank shed 4.9 percent after two people familiar with the matter said Germany's top lender was considering a capital increase to bolster its balance sheet as Basel III capital requirements are finalized. [ID:nLDE6850Q9]

Even though U.S. crude oil rose 2.5 percent, a leading forecaster said demand would remain tepid. [ID:nSGE689037]

The International Energy Agency said global oil demand growth was expected to increase a little this year but slip in 2011 and that fuel consumption could be much weaker if the world economy slows. [IEA/M]

U.S. light sweet crude oil rose $1.82 to $76.07 a barrel. Brent crude gained 51 cents to $77.98.

The dollar was down against a basket of major currencies, with the U.S. Dollar Index <.DXY> off 0.07 percent at 82.613.

U.S. Treasury prices fell as investors reduced their holdings of safe-haven government bonds after a record supply of higher-yielding corporate bonds this week. [ID:nN10321375]

The benchmark 10-year U.S. Treasury note was down 10/32 in price to yield 2.79 percent.

December Bund futures took a drubbing as investors reassessed some of the extreme bearishness priced into bond markets in the wake of recent data suggesting the slowdown in the U.S. economy may not be as bad as feared.

"We saw that strong data led to some sell-off in the market and weak data had no impact. This means the rally is running out of steam," said Patrick Jacq, strategist at BNP Paribas.

December Bund futures settled down 73 ticks at 130.05.

Copper steadied as investors weighed strong metals import data from top consumer China versus ongoing fears that the country will tighten monetary policy. [ID:nLDE6890KX]

Beijing has moved the release of key economic data for August to Saturday from Monday, prompting speculation the numbers could trigger a strong reaction on financial markets. Markets are particularly concerned about a possible surge in China's consumer price index.

Spot gold prices rose $2.35 to $1,245.90 an ounce.

Earlier in Asia, stocks rose to a four-month high. The MSCI index of Asia Pacific stocks outside Japan edged up 0.1 percent <.MIAPJ0000PUS>, while Tokyo's Nikkei share average closed 1.6 percent <.N225> higher. (Reporting by Rodrigo Campos, Nick Olivari, Richard Leong in New York; Marie-Louise Gumuchian, Ian Chua, Atul Prakash, Kirsten Donovan, Pratima Desai and Humeyra Pamuk in London; Writing by Herbert Lash; Editing by Dan Grebler)

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