* Dollar steady, Asia stocks waver ahead of Fed meeting
* Asia currencies firm as Dubai bailout helps risk appetite
* Oil stabilises after nine-day slide
(Repeating to more subscribers)
By Susan Fenton
HONG KONG, Dec 15 (Reuters) - The dollar steadied on
Tuesday and Asian stocks wavered, despite improving appetite
for riskier assets, as investors turned cautious ahead of a
meeting of the U.S. Federal Reserve.
European shares were set to open slightly higher, according
to financial spreadbetters, while U.S. equity futures <SPc1>
were up 0.5 percent ahead of a slew of economic data later in
the day. []
The dollar <.DXY> was virtually unchanged against a basket
of major currencies at 76.412 as markets braced for the two-day
Fed meeting starting later on Tuesday.
Investors expect a pledge from the Fed to maintain very low
interested rates for an extended period, but they will be on
guard for any new indications about monetary policy, especially
after recent upbeat sales and jobs data prompted some
speculation of a rate rise in mid-2010. []
"The market is now just waiting for more trading clues. The
Fed meeting and its statement as well as U.S. economic data and
ensuing reactions in the currency market are a main focus,"
said Kazuhiro Takahashi, general manager at Daiwa Securities
SMBC in Japan.
The dollar found some support against the euro <EUR=> amid
persistent concerns about sovereign risk in Europe after Greece
was downgraded last week, prompting the Greek government to
announce measures on Monday to rein in debt. []
The dollar was quoted at 1.4641 to the euro <EUR=>, up from
1.4650 in late New York trade.
"Though the dollar index has broken the 55-day moving
average, now around 75.71, and has had more good than bad
sessions of late, it continues to face headwinds," said David
Watt, senior currency strategist at RBC Capital Markets in
Australia.
"If the Fed highlights exit strategies, watch the topside
in the dollar index. If they highlight the 'extended period' of
low rates, watch the 55-day moving average."
Abu Dhabi's surprise decision on Monday to provide Dubai
with $10 billion to help its neighbour avoid a debt default has
boosted risk appetite among investors globally. Dubai's stock
market was up nearly 3 percent in early trade, extending
Monday's 10 percent rally. []
Improving risk appetite helped Asian currencies such as the
Taiwan dollar <TWD=> but not the Australian dollar <AUD=>,
which slipped as minutes from this month's central bank meeting
showed the decision to raise interest rates was a lot closer
than markets had thought. []
SHARES SUBDUED
With attention shifting to the Fed meeting, Asian shares
were subdued after rebounding on Monday on the Dubai news.
Japan's Nikkei share index <> fell 0.2 percent as the
yen <JPY=> edged up against the dollar, putting pressure on
shares of exporters.
Japanese markets also continue to be weighed down by
growing worries about the country's deteriorating fiscal
health.
An auction of 20-year Japanese government bonds on Tuesday
drew the weakest investor response in more than three years,
reflecting concern about the government's commitment to
restoring fiscal discipline and pushing the JGB yield curve to
a seven-year peak. []
Japan's government said in budget guidelines published
earlier on Tuesday that it will keep new bond issuance around
or below 44 trillion yen ($495 billion) in the next fiscal year
that starts in April. But many market watchers are not
convinced it can meet that goal, with tax revenues expected to
remain at low levels next year.
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> was down 0.2 percent, and analysts expect
investors will continue to take profits before year-end,
locking in some gains from the index's 65 percent rally this
year.
The Thomson Reuters index of regional shares <.TRXFLDAXPU>
was down 0.3 percent.
ABN AMRO Private Banking, however, is still recommending
investors buy into emerging market equities, arguing that those
markets will continue to attract capital flows.
"Business confidence and financial conditions are being
progressively restored to move ahead into a sustained recovery.
The big picture favours moving away from low cash deposit rates
towards higher-yielding assets," Didier Duret, chief investment
officer at ABN AMRO Private Banking, said in a note with the
bank's outlook for the first quarter of 2010.
Financial markets will be scrutinising a string of U.S.
data due on Tuesday, including industrial production, producer
prices and the NAHB housing index for December, for indications
on the health of the world's biggest economy. []
Energy shares in Australia got a lift on news that Exxon
Mobil Corp <XOM.N>, the world's largest listed energy company,
planned a $30 billion takeover of natural gas supplier XTO
Energy <XTO.N>. []
"A couple of big pieces of news like that is very
encouraging. The Exxon move has put a bit of enthusiasm back
into the market and it's supportive of our coal seam gas
sector," said Ivor Ries, an analyst at E.L. & C. Baillieu
Stockbroking in Australia.
Origin Energy <ORG.AX> rose 1.5 percent.
Oil futures prices <CLc1> edged higher to just below $70 a
barrel, after falling for nine straight days.
Oil has dropped more than $8 a barrel since Dec. 1, its
longest slide since July 2001, as rising U.S. inventory levels
indicated sluggish fuel demand.
Gold prices <XAU=> retreated to $1,123.60 an ounce, from
$1,126.20 at the New York close, amid uncertainty about the
dollar's immediate direction.
(Additional reporting by Victoria Thieberger in MELBOURNE,
Elaine Lies in TOKYO and Anirban Nag in SYDNEY; Editing by Kim
Coghill)
(susan.fenton@thomsonreuters.com; +852 2843 6367; Reuters
Messaging: susan.fenton.thomsonreuters.com@reuters.net)
