* U.S., Europe stocks dip; Wall St volume lowest in 2011
* Euro retreats versus dollar; DXY near 15-month low
* Nikkei futures dip after three days of gains
* U.S. crude up as unrest escalates in Yemen
(Updates with U.S. markets close, changes quote)
By Rodrigo Campos
NEW YORK, March 22 (Reuters) - U.S. crude prices jumped on
Tuesday as unrest in Yemen raised concerns about a further
threat to supply and as the dollar traded near 15-month lows
against major currencies.
Expectations that interest rates will rise in Europe before
they do so in the United States weighed on the dollar. Although
the euro eased back after hitting a 4-1/2-month high against
the greenback, expectations of a euro zone rate hike next month
could limit any downside for the single currency.
Camilla Sutton, senior currency strategist at Scotia
Capital in Toronto said she expects the euro to test its
November high versus the greenback.
"We believe that recent developments have all been negative
for the U.S. dollar and positive for the euro," she said.
UK inflation data on Tuesday fueled expectations of a
British rate hike in coming months, driving sterling to a
14-month high against the U.S. currency.
Stocks in the United States and Europe fell slightly, and
trading volume was the lowest so far this year in Wall Street.
"As far as upward momentum, I don't think it's there
anymore," said Terry Morris, senior equity manager at National
Penn Investors Trust Company in Reading, Pennsylvania.
"So it's a wait-and-see attitude and not a lot of
commitment from either side at this point."
With crude oil flows from Libya already crippled by a
standoff between rebels and the government, worries over
further supply disruptions rose as thousands of Yemeni
protesters took to the streets clamoring for President Ali
Abdullah Saleh to step down.
"The situation in the Middle East is still very bullish for
oil," said Phil Flynn, analyst at PFGBEST Research in Chicago.
"The unrest spreading on top of the conflict in Libya is still
the market focus."
The Dow Jones industrial average <> dipped 17.90
points, or 0.15 percent, to 12,018.63. The Standard & Poor's
500 <.SPX> fell 4.61 points, or 0.36 percent, to 1,293.77. The
Nasdaq Composite <> lost 8.22 points, or 0.31 percent, to
2,683.87.
The MSCI global stocks index <.MIWD00000PUS> was up 0.36
percent, buoyed by an overnight 4.4 percent rise in Japanese
stocks. U.S. dollar-denominated Nikkei futures <NKc1> edged 0.3
percent higher after posting losses for most of the U.S.
session.
Europe's main equity benchmark <> closed 0.06 percent
lower after hitting a one-week high on Monday.
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EURO RETREATS, CRUDE REVERSES LOSSES
The euro <EUR=> dipped after hitting $1.4249 versus the
U.S. dollar, its highest level since November, as it ran into
what traders said were options-related barriers.
Still, expectations that the European Central Bank will
hike interest rates next month could limit any downside for the
common currency.
"This, to me, is just a technical pullback," said Joseph
Trevisani, chief market analyst at FX Solutions in Saddle
River, New Jersey.
Gold was little changed as interest-rate hike expectations
kept the market calm, but air strikes on Libya and escalating
political unrest in the Middle East underpinned safe-haven
demand.
U.S. oil prices <CLc1> rose 1.6 percent to $104.53 per
barrel while Brent <LCOc1> added 0.7 percent at $115.74.
Copper <CMCU3> rose supported by the weaker dollar, but
poor Chinese import data weighed on demand prospects.
Chinese data released on Monday showed lower-than-expected
commodities imports for February.
China's rare earth metal export prices in February,
however, were up almost ninefold from a year before, according
to Reuters calculations based on Chinese data [].
The rise in export values has coincided with a collapse in
volumes coming out of China.
Shares in U.S. miner Molycorp <MCP.N>, one of the few
companies outside China that is well-placed to capitalize on
the constriction in supply, jumped nearly 18 percent.
U.S. Treasuries were little changed in low volume as
investors looked for further progress in Japan and the Middle
East. Benchmark 10-year notes <US10YT=RR> were last unchanged
in price, yielding 3.33 percent.
(Additional reporting by Chuck Mikolajczak, Karen Brettell,
Wanfeng Zhou, Joshua Schneyer and Tom Miles; Editing by Leslie
Adler)
