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* Asian stocks cut early losses after Dubai statement
* Yen falls and euro rises as Dubai news boosts risk
appetite
* Emerging Asian currencies rise vs dollar
By Kevin Yao
SINGAPORE, Dec 14 (Reuters) - Asian stocks rebounded on
Monday after Dubai said it had received $10 billion from Abu
Dhabi to repay debt, which pushed down the yen but boosted the
euro and emerging Asian currencies as risk appetite improved.
The dollar shot up to 88.90 yen <JPY=> after the statement
from around 88.50 yen. The euro also jumped to 130.43 yen
<EURJPY=> from around 129.40 yen.
Emerging Asian currencies, such as the South Korean won
<KRW=> and Indian rupee <INR=IN>, firmed against the dollar,
taking their cue from the firmer euro.
"It's all about risk appetite," said Sean Callow, currency
strategist at Westpac Banking Corporation.
"If Dubai doesn't default and thus there is no ripple
through markets to its creditors as was feared in late
November, then riskier assets and currencies can perform better
and safe havens such as yen, dollar and CHF will be sold in
knee jerk fashion."
Dubai said it had received $10 billion from Abu Dhabi to
help it repay $4.1 billion in an Islamic bond maturing on
Monday, easing fears of a potential debt default that had
rattled global markets. []
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> gained two tenths of a percent at 0540 GMT
after losing almost 1 percent in early trade.
Asian stocks have rallied more than 60 percent this year.
The Thomson Reuters index of Asia ex-Japan equities
<.TRXFLDAXPU> also pared earlier losses.
Asian shares gained strongly on Friday after a slew of
Chinese data showed the world's third-largest economy remained
on a brisk recovery path.
The dollar index <.DXY> shed a third of a percent to 76.31,
after it hit a six-week high on Friday on views the Federal
Reserve might raise rates sooner than expected.
As the dollar fell, gold <.XAU=> gained steam and rose 1
percent to 1,125 per ounce, moving away from four-week lows hit
on Friday.
Wall Street stocks mostly rose after U.S. retail sales
posted the largest advance since August last month, while
consumer sentiment improved sharply in December.
The Fed is likely to keep rates unchanged near zero after a
a two-day meet starting on Tuesday. Investors are focused on
the accompanying statement to see if it reiterates a dovish
bias despite the recent run of strong data.
Many analysts expect the dollar to trade lower on views the
Fed will lag other central banks in tightening policy given
tame price pressures, suggesting the dollar will remain a
funding currency for carry trades.
"We do not expect this dollar strength to last," said
Callum Henderson, chief global currency strategist at Standard
Chartered Bank.
"Those riskier assets will need a currency to fund them and
that currency is the U.S. dollar as such, we expect dollar
gains to reverse once the market reassesses the fundamental
impact of this data."
Meanwhile, U.S. crude futures fell as much as $1 to below
$69 a barrel, extending declines into a ninth session, hurt by
worries over high oil inventories and a stronger dollar.
NYMEX crude for January delivery <CLc1> was down 53 cents
at $69.34 barrel by 0520 GMT.. On Friday, it settled down 67
cents, marking an eighth straight session of losses.
(Editing by Jan Dahinten)
