* Dollar slips after overnight gains, ahead of euro zone GDP
* World stocks drifted higher; commodities gain
By Dominic Lau
LONDON, Nov 13 (Reuters) - The U.S. dollar eased on Friday
after overnight gains and ahead of euro zone growth data,
boosting metal and crude prices, while world stocks drifted
higher.
The dollar <.DXY> rose overnight against a basket of
currencies but succumbed to another sporadic bout of
profit-taking, and traders said the currency's broad weakness
was likely to continue over the longer term.
World stocks measured in the MSCI All-Country World Index
<.MIWD00000PUS> ticked up 0.6 percent, lifted by a 0.2-percent
rise in Europe's FTSEurfirst 300 <> index, though Japan's
Nikkei average <> lost 0.4 percent.
The U.S. Dow Jones industrial average <> six-day winning
streak came to a halt on Thursday, partly because a guarded
outlook from Wal-Mart <WMT.N> fanned worries about consumer
spending.
"The euro zone GDP data will be the main focus for today,
and the euro could see some support if we get the confirmation
that the euro zone has come out of recession," said Sverre
Holbek, currency strategist at Danske Bank in Copenhagen.
"But otherwise general risk appetite is likely to be the
driver, with currency markets looking to equity and commodity
markets."
The dollar fell 0.2 percent to 90.15 yen <JPY=>, while the
euro <EUR=> was up 0.3 percent against $1.4887.
U.S. President Barack Obama kicks off his first official
tour of Asia by meeting Japanese Prime Minister Yukio Hatoyama
on Friday, then goes to Singapore, China and South Korea.
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High on the agenda will be U.S. calls for Asian countries to
do more to stimulate domestic demand instead of relying on
exports to America. That would likely require much of Asia, and
China in particular, to let their currencies appreciate.
Investors also kept an eye on the euro zone third-quarter
gross domestic product (GDP) data, due at 1000 GMT.
Earlier, Germany announced its GDP grew by 0.7 percent in
the third quarter, slightly weaker than the Reuters consensus
forecast for growth of 0.8 percent, while France's economy
expanded by 0.3 percent in the same quarter, also lower than the
forecast of 0.6 percent in a Reuters poll.
ASSET ALLOCATION
UBS said it retained its existing asset allocation of
overweight global equities, a small overweight position in
high-yield corproate bonds and commodities and a large
underweight of cash. It was neutral on government bonds, high
grade credits and inflation-linked bonds.
"Until leverage resumes market outcomes will be driven
mostly by growth and earnings expectations," UBS said in a note.
"Importantly ... uncertainly about monetary policy 'exit
strategies' is likely to boost market volatility next year. And
with many asset classes now close to 'fair value', risk-adjusted
returns are likely to be lower in the year to come."
The VDAX-NEW volatility index <.V1XI>, a measure of investor
risk appetite or aversion, was down 0.3 percent. The lower the
volatility index, the higher is investors' appetite for risky
assets such as equities.
Aided by the weaker dollar, crude prices <CLc1> rose above
$77 a barrel, while gold <XAU=> advanced 0.5 percent to
$1,108.75 an ounce.
Bullion has gained more than 5 percent as it marked a new
record high for six out of the eight sessions through Thursday,
touching an all-time peak of $1,122.85 on the view that dollar
would remain weak.
Yields on benchmark 10-year U.S. Treasuries <US10YT=RR> were
down 1 basis point at 3.433 percent, while those on 10-year Bund
<EU10YT=RR> was down 3 basis points at 3.340 percent.
(Additional reporting by Jessica Mortimer in London, Wayne Cole
in Sydney and Miho Yoshikawa in Tokyo; Editing by Andy Bruce)
