* Dollar rises after Bernanke sees tighter policies
* Crude and metal prices ease in response
* Emerging market shares break higher ground
By Dominic Lau
LONDON, Oct 9 (Reuters) - The dollar rose on Friday after
Federal Reserve Chairman Ben Bernanke indicated U.S. monetary
policy could be tightened as a recovery takes hold, sending
crude and metal prices lower.
World stocks <.MIWD00000PUS> were steady as retreating
commodity prices hurt heavyweight miners, offsetting gains in
Asia <.MIASJ0000PUS> and emerging markets.
Shares in emerging markets <.MSCIEF> advanced 0.3 percent,
hitting a more than 13-month high for the fourth straight day,
after better-than-expected U.S. corporate earnings and economic
data soothed fears about the strength of the economic recovery.
In Europe, the FTSEurofirst 300 <> index was down 0.2
percent, while U.S. stock index futures <DJc1> <SPc1> <NDc1>
eased 0.1-0.4 percent, pointing to a softer start for Wall
Street.
Bernanke said on Thursday that the Fed must continue to prop
up the economy for an extended period but can't do so
indefinitely for fear of triggering an inflationary surge.
[]
His comments lifted the dollar <.DXY> off 14-month lows
against a basket of currencies. The greenback was up 0.6 percent
at 88.84 yen, while the euro <EUR=> fell 0.3 percent to $1.4746.
"The high inflation concerns upon which gold has been
soaring until now may start to fade as the Fed (favours) a
stronger dollar," said Pradeep Unni, senior analyst at Richcomm
Global Services in Dubai.
Gold prices <XAU=> pulled back to below $1,050 an ounce,
snapping a rally that took prices of the precious metal to
record highs for three days in a row, while oil <CLc1> fell to
$71 a barrel.
European Central Bank President Jean-Claude Trichet said the
ECB would remove extra measures boosting the economy when they
become a threat to price stability. []
Meanwhile, Chinese Vice President Xi Jinping said China's
economic recovery was not yet on a solid footing so the country
will carry on with its fiscal stimulus for now. []
Governments and central banks around the globe have injected
trillions of dollars into their economies in the past year or so
to pull the world out of the most severe recession since the
1930s Great Depression.
The flood of liquidity has helped boost all investment asset
classes from equities to government bonds.
PARTY COMING TO AN END?
The MSCI world equity index has rallied nearly 70 percent
since hitting a low in early March.
"The longer that the rally lasts -- and the higher that
equity prices go -- the greater the likelihood that, in this new
world, policymakers will see their new job description as being
to take away the punch bowl before the party gets going, not
just in the usual sense of the word ... but before asset price
pick-ups can become booms," said Michael Dicks, head of research
and investment strategy at Barclays Wealth, in a report
"For this reason, we remain circumspect concerning the
longevity of any equities rally persisting through 2010."
In another sign that the economy is on the mend, Europe's
largest telecom Telefonica <TEF.MC> offered bigger-than-expected
dividends.
The Spanish company said it would hike its 2010 dividend per
share by nearly 22 percent to 1.40 euros ($2.07), far
outstepping analyst expectations for 1.27 euros per share.
Wynn Macau <1128.HK>, the Asian unit of Wynn Resorts
<WYNN.O>, had a strong debut of its $1.63 billion initial public
offering -- the world's sixth-largest in 2009 -- in Hong Kong.
Yields on benchmark 10-year U.S. Treasuries <US10YT=RR> were
up 2 basis points at 3.264 percent, while the 10-year German
bund yield <EU10YT=RR>, the euro zone's benchmark, was flat at
3.143 percent.
(Additional reporting by Jan Harvey in London; Editing by Ron
Askew)
