* Dollar drops vs euro, yen and Swiss franc
* Treasuries rise on CPI, weak U.S. housing data
* LCH doubles margin requirement on Irish gov't bonds
(Rewrites first paragraph, updates with opening of U.S.
markets, adds to byline, dateline)
By Jennifer Ablan and Michel Rose
NEW YORK/LONDON, Nov 17 (Reuters) - The dollar fell against
the euro, yen and Swiss franc on Wednesday and U.S. stocks
wavered between gains and losses as the lack of a solution to
Ireland's debt crisis weighed on markets.
Treasuries prices rose after U.S. government figures showed
the lowest core annual inflation rate on record and a steep
drop in housing starts from already depressed levels. The data
forcefully argued the case for the Federal Reserve to buy
government bonds to stimulate the economy.
In New York trade, the euro rose as high as $1.3539 and
last traded at $1.3534, up 0.3 percent from the prior close
<EUR=>. The dollar was little changed at 83.26 yen <JPY=> and
last traded at 0.9906 Swiss francs <CHF=>, down 0.5 percent.
Both were the session lows.
Euro zone finance ministers have agreed to lay the
groundwork for bailing out Ireland's banking sector with the
IMF, but Dublin has yet to decide whether to request the aid.
The nervousness grew after European clearing house LCH.
Clearnet doubled its margin requirement on Irish government
bonds to 30 percent of net positions, citing higher Irish
yields over German benchmarks.
"If we get a resolution to Ireland's problems, you could
see the euro bounce," said Omer Esiner, chief market analyst at
Commonwealth Foreign Exchange in Washington. "The overall bias
is to the downside, given uncertainty about not just Ireland
but Portugal and Spain."
The euro briefly gained after a report showed U.S. consumer
prices rose less than expected in October and the increase in
the year-on-year core rate was the smallest on record. For
details, see []. But the single currency has lost
3.2 percent this month as investors have cut long positions as
peripheral debt worries mount.
World markets were also hit by interest rate concerns
involving China, the global growth engine. Premier Wen Jiabao
said his government was preparing steps to tame price rises,
fueling expectations China will intensify tightening policies,
possibly as soon as Friday.
"Chinese rate hike prospects are one thing (affecting
markets). There is also the prospect of tighter measures on
inflows in Asia, especially Korea," said Gaelle Blanchard,
emerging markets strategist at Societe Generale.
Chinese shares closed down 1.9 percent, sending wider Asian
stocks to their lowest levels in four weeks and hitting other
countries that depend on China's growth, such as Australia.
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U.S. Treasury debt prices were higher on weak consumer
price and housing data. Starts on new homes slumped to the
lowest in 1-1/2 years in October, the government said.
The benchmark 10-year Treasury note <US10YT=RR> was up
6/32, with the yield at 2.82 percent. The 2-year U.S. Treasury
note <US2YT=RR> was up 1/32, with the yield at 0.49 percent.
The 30-year U.S. Treasury bond <US30YT=RR> was up 6/32, with
the yield at 4.26 percent.
On Wall Street, only the Nasdaq composite was up of the
major stock indices.
The Dow Jones industrial average <> was down 3.93
points, or 0.04 percent, at 11,019.57. The Standard & Poor's
500 Index <.SPX> was up 3.16 points, or 0.27 percent, at
1,181.50. The Nasdaq Composite Index <> was up 12.37
points, or 0.50 percent, at 2,482.21.
For its part, MSCI's all-country world stock index
<.MIWD00000PUS> rose 0.62 percent while the FTSEurofirst 300
<> index of leading European shares advanced by the same
percentage to 1,093.
In energy and commodities prices, U.S. light sweet crude
oil <CLc1> fell 32 cents, or 0.39 percent, to $82.02 per
barrel, and spot gold prices <XAU=> rose 95 cents, or 0.07
percent, to $1341.40. The Reuters/Jefferies CRB Index <.CRB>
was up 0.87 point, or 0.29 percent, at 297.09.
(Editing by Kenneth Barry)
