GLOBAL MARKETS-Euro, stocks retreat before Fed vote, silver swoons

                                
 * Dollar demand seen strong from Japanese funds
                                
 * U.S. Treasuries firm on extended rate pause bets
                                
 * Silver takes a beating after CME margin hike
                                
 * Nikkei down about 1 percent, KOSPI hovers below record
high

                                
 By Saikat Chatterjee	
                                
 HONG KONG, April 26 (Reuters) - The euro retreated on
Tuesday, though losses are seen as limited, while Asian shares
pulled back from recent three-year peaks before this week's
Federal Reserve meeting where investors will hunt for clues on
when it plans to exit ultra-easy monetary policy.	
                                
 Commodity prices too succumbed to a bout of
profit-taking after silver fell more than 1 percent when
it failed to break key technical resistance levels. Analysts
said the sell-off spilled over into other commodities including
oil, despite violent protests in Syria. 	
                                
 The single currency took a knocking after European
Central Bank Governor Jean-Claude Trichet said he shares the
view that a strong dollar is in the interest of United States,
though the prospects of widening interest rate differentials
between the Fed and the ECB may check losses.[ID:nEBE7DA00T]	
                                
 "I don't take it lightly that Trichet is talking about the
dollar rather than the euro. European policymakers became
alarmed when the euro rose above $1.45 in 2007 and they started
to rein in the dollar's fall," said Minori Uchida, a senior
analyst at the Bank of Tokyo-Mitsubishi UFJ, adding that
policymakers globally are increasingly worried about the
dollar's fall. 	
                                
 Equity markets across the region were largely subdued with
Japan's Nikkei down about one percent. Shares outside
Japan , which last month hit their highest level
since early 2008, were down about 0.5.	
 	
                                
    	
                                
 Credit markets too reflected the overall cautious sentiment
with credit spreads widening slightly as the broader market was
wary of a heavy pipeline after a recent flood of issuances.	
                                
 Issuance of dollar-, euro- and yen-denominated bonds from
Asia ex-Japan have already exceeded $30 billion year-to-date,
clearly ahead of the pace set in 2010, which saw record issuance
of more than $83 billion.	
                                
 	
                                
 AND THE WINNER THIS MONTH IS..	
                                
 South Korea's KOSPI dipped slightly after hitting
yet another record high earlier, though it is set to outperform
regional indices in a big way this month.	
                                
 The KOSPI's more than 5 percent rise in April has been led
by automakers and chipmakers with the former benefiting from the
production hit suffered by Japanese competitors in the wake of
last month's earthquake and tsunami and the latter getting a
boost from strong earnings by Intel and Apple.	
                                
 That has attracted chunky offshore flows. Foreign investors
were buyers of a net 124.2 billion won ($114.9 million) worth of
stocks on Monday, purchasing for a fourth straight session. 	
  	
                                
 EXTENDED PAUSE	
                                
 In currency markets, the greenback came under a bit of
selling pressure versus the yen in early trade but losses
were limited on expected dollar demand from Japanese asset
management firms as a number of investment trusts, or toushin,
are due to be launched on Tuesday.    	
                                
 Trade was volatile as investors were reluctant to
make big bets before the April 26-27 Federal Open Market
Committee meeting while rate markets reflected that any
tightening measure was going to be a long slow grind.
 	
                                
 In fed fund futures markets <0#FF:>, the contract expiring
in December 2011 has fully priced in a target interest rate of
0.25 percent, the top end of the central bank's current rate
range of zero to 0.25 percent but the January 2012 contract only
implied a slim 6 percent chance of another hike to 0.5 percent.	
                                
 Such bets of a slow increases in rates have kept traders
interested in buying U.S. Treasuries, pushing the 10-year U.S.
yield down more than 20 basis points from this month's highs of
3.36 percent, despite a recent outlook downgrade by ratings
agency Standard & Poor's.	
                                
 Silver, which has nearly doubled from the January lows, fell
after the CME raised COMEX 5000 Silver <0#SI:> maintenance 	
margins for speculators by nearly 10 percent.[ID:nL3E7FP2EW]    
                                
 	
 	
                                
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 (Additional reporting by Haruya Ida, Hideyuki Sano in TOKYO and
Umesh Desai; Editing by Richard Borsuk)