* Euro gains on expectations of rise in interest rates
* Global stocks buoyant; Wall Street ends higher
* Brent loses some earlier gains; gold hits record high
* Portugal requests EU aid after resisting bailout
(Adds details)
By Leah Schnurr
NEW YORK, April 6 (Reuters) - The euro rose broadly on
Wednesday a day ahead of an expected interest-rate hike in the
euro zone, while Portugal's about-face decision to request
financial aid from the European Union had little impact.
Lisbon had held out hope that by steadily meeting budget
goals and cutting spending it could regain investor confidence
and avoid a bailout. But Portugal's situation worsened last
month after its government resigned, sending bond yields
soaring and sparking a series of rating downgrades.
In announcing the decision in a televised statement,
Portugal's prime minister did not specify what type of aid nor
how much was being requested. For details see [].
The lack of market reaction suggested investors had already
viewed the request for aid as a foregone conclusion. The euro
was at a 14-month high against the dollar ahead of the expected
interest rate hike from the European Central Bank on Thursday.
"In some ways it is a positive -- I think Portugal was in
denial. On this side of the pond no one understood exactly how
Portugal was going to be able to dig out of its problems
without getting aid," said David Dietze, chief investment
strategist at Point View Financial Services in Summit, New
Jersey.
The slumping greenback and strife and political unrest in
North Africa and the Middle East had sent Brent crude to a
2-1/2-year high above $123 a barrel before settling off its
highs.
Among other commodities, gold racked up a record high and
silver rallied to a 31-year high for a third consecutive day.
Inflation fears have boosted precious metals, as oil and corn
prices reached new peaks in recent days. A weaker greenback
also makes dollar-priced assets more affordable to holders of
the euro and other currencies.
Global equities gained on a generally brighter economic
picture and U.S. stocks ended higher with help from tech
shares. Volume on Wall Street was relatively light.
The Dow Jones industrial average <> gained 32.85
points, or 0.27 percent, to end at 12,426.75. The Standard &
Poor's 500 Index <.SPX> rose 2.91 points, or 0.22 percent, to
1,335.54. The Nasdaq Composite Index <> added 8.63 points,
or 0.31 percent, to 2,799.82.
World stocks, measured by the MSCI <.MIWD00000OOPUS>,
gained 0.4 percent.
ECB RATE HIKE IN VIEW
The euro was strong throughout the day ahead of the rate
decision and on speculation the ECB will also signal further
interest rate rises.
Japan, on the other hand, looks set to lag other central
banks in tightening and the yen slumped to an 11-month low
against the euro and a six-month low against the dollar.
The euro <EUR=> was last up 0.8 percent at $1.4334 and
against the yen <EURJPY> it was up 1.4 percent at 122.45 yen.
"The markets are very bullish with respect to the
anticipated Trichet communique tomorrow. They expect quite
strongly that the ECB is heading toward normalization of
monetary policy," said Dean Popplewell, chief currency
strategist at OANDA in Toronto, referring to ECB President
Jean-Claude Trichet.
Spot gold <XAU=> hit a record $1,461.91 an ounce before
easing to $1,458.90, up 0.6 percent. Silver <XAG=> rose as high
as $39.75 an ounce. Brent crude <LCOc1> settled up 8 cents at
$122.30 a barrel. U.S. crude <CLc1> settled up 49 cents at
$108.83.
Earlier in the day, Portugal sold 1.005 billion euros
($1.43 billion) in 12- and six-month T-bills, but yields rose
sharply from last month's auctions.
The 12-month T-bill yield rose to 5.902 percent from 4.331
percent in the auction three weeks ago, while the yield on the
shorter maturity rose to 5.117 percent from 2.984 percent in a
sale in early March.
Demand, however, outstripped supply by 2.6 times for the
12-month bills and by 2.3 times for the six-months.
(Additional reporting by Chris Reese, Wanfeng Zhou, Frank Tang
and David Sheppard; Editing by James Dalgleish)
