* Federal Reserve to meet later, weigh more easing
* Nikkei slips as strong yen worries linger
* Aussie jumps on hawkish RBA minutes
* Gold steady near record high
(Repeats to more subscribers)
By Alex Richardson
SINGAPORE, Sept 21 (Reuters) - The dollar slipped towards a
five-week low on Tuesday and oil fell as traders braced for a
Federal Reserve meeting later in the day where policymakers may
discuss whether the fragile U.S. economy needs a fresh infusion
of cash.
Asian shares were subdued despite a positive lead from Wall
Street, where optimistic corporate news from the likes of IBM
<IBM.N> had pushed the S&P 500 <.SPX> to a four-month closing
high. []
Leading European shares <> opened a little lower.
The FTSEurofirst 300 <>, Britain's FTSE 100 <>,
France's CAC 40 <> and Germany's DAX <> fell 0.1-0.2
percent in early trade. European shares had rallied 1.4 percent
on Monday, snapping a four-session losing streak.
"The surge has shifted what was becoming growing bearish
sentiment back to the uptrend, but only with the expectation
that the Federal Reserve will outline actions aimed at helping
the U.S. economy," Raghee Horner, chief market analyst at
Autochartist, wrote in a note.
Few market players expect the Fed to make further easing
moves just yet -- and the dollar could gain if that view plays
out -- but it is seen as much more likely that it will signal
its readiness to act if necessary.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a preview of Tuesday's Fed meeting, see:
[]
Opportunities for yuan trading: http://r.reuters.com/cad44p
Eye on yen intervention: http://r.reuters.com/zuz33p
For gold in Asian currencies:
http://link.reuters.com/dan54p
For dollar/yen correlations: http://link.reuters.com/wyn43p
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Investors will focus on the wording of the Fed's policy
statement on the outlook for the U.S. economy and whether it
suggests a transition from targeting already rock bottom
interest rates to targeting its own balance sheet through
quantitative easing -- effectively printing money to buy
mortgage bonds and securities.
"Ongoing speculation of the Fed embarking on another round
of QE is keeping the U.S. dollar under the cosh," said Sue
Trinh, senior currency strategist at RBC in Hong Kong.
"I'm not sure the market's going to get too much resolution
after the FOMC today. Even if they don't signal any imminent
QE, the market's speculation is more focused on the next few
months."
Japan's Nikkei <> hit a 7-week high before falling
back to close down 0.2 percent as worries about the yen --
whose recent strength is a big problem for the export-led
economy -- persisted despite last week's intervention to curb
it by the authorities. []
"The intervention helped boost the Nikkei last week but
fundamentally nothing's changed either in the U.S. or Japanese
economy," said Nagayuki Yamagishi, a strategist at Mitsubishi
UFJ Morgan Stanley Securities.
"The fact that Japan did the intervention on its own also
means there are limits to the long-term impact."
Japanese government bonds edged up following gains in U.S.
Treasuries, with any hint that the Federal Reserve may be
leaning towards further quantitative easing seen as positive
for the U.S. debt market. [] []
MSCI's index of Asian shares outside Japan <.MIAPJ0000PUS>
was flat, with techs and industrials the only two members of
its 10 constituent sub-indexes in positive territory.
In Europe, sovereign debt markets will be looking at an
Irish auction of up to 1.5 billion euros of 2014 and 2018
bonds.
Doubts about Ireland's fiscal strength helped push the
10-year German/Irish bond yield spread to a euro-lifetime high
425 basis points on Monday. []
DOLLAR SELLING
The dollar index <.DXY> against a basket of other major
currencies eased 0.2 percent to 81.21, near a five-week low of
80.865 hit last week.
The dollar was little changed at 85.40 yen <JPY=>, falling
away from its post-intervention high of 85.94 hit on Friday.
Tokyo has not been spotted in fresh currency interventions
since its massive yen-selling spree on Wednesday, though
Japan's prime minister warned markets last week that
authorities are ready to step in to curb yen strength again.
[]
More dollar selling by Japanese exporters is expected
towards 86 yen level before the end of September, when many
Japanese exporters close their books.
"Share prices are rising, so there's no strong reason to
buy the yen at the moment. But on the other hand, there will be
yen buying on any dip," said a trader at a major Japanese bank.
The Australian dollar <AUD=D4> spiked to about $0.9477
after minutes from the Reserve Bank of Australia confirmed its
hawkish stance, saying the central bank stood ready to use
interest rates to help manage an expected strong pick-up in the
economy. []
U.S. crude for October <CLc1> delivery fell 71 cents to
$74.15 a barrel, in a move magnified by the contract's expiry
later in the day, resuming last weeks trend on lingering
worries about the health of the U.S. economy, a major factor in
demand. []
Gold <XAU=> eased to around $1,276.50 an ounce, off the
record $1,283.70 hit in the previous session. []
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