The dollar weakened against the euro in the European foreign exchanges Monday, helping the gold price hit a fresh record high, boosting copper and other base metal prices, and helping mining, energy and raw material stocks lift equity markets as a whole.
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Crude oil prices are vulnerable to a sharp downward correction because long positions on Nymex crude are at an 'unstable' high level, analysts warn.
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Gold’s seemingly unstoppable rally paused Thursday due to dollar strength and lower equities. Key to future moves will be the dollar, because gold is being bought as a hedge against currency weakness and is benefiting from the carry trade.
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The GBP continues to levitate despite minutes showing that the BOE has little confidence in the UK recovery. Support is coming from the continued appetite for global risk. But, if and when this goes, the pound will fall sharply.
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Obama may be leaving Beijing with no assurance that China will allow the Yuan to start appreciating again. However, with the China economy remaining strong and money growth remaining high, the risk of inflation means China may yet let the yuan start to move again next year.
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Oil prices rebound above $77 from sharp losses, boosted by a weaker dollar. But fundamentals remain sluggish - US refinery runs are at the lowest levels in decades, reflecting persistent weak consumer demand.
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Stocks rose only a little after Fitch’s warning about the U.K. and ZEW's disappointing decline helped to remove risk appetite. However, markets still appear encouraged by G-20's continued easy monetary policy.
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After a week of central bank meetings, key data and a G-20 summit, little has changed in terms of policy. Equities are rallying as a result, helped by strong Aussie housing data and an upgrade of the outlook for China.
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The Fed and the Bank of England are slowing down asset purchases as economic conditions improve. But, with government bond issuance hitting record levels, this week’s rising bond yields could be just the beginning of a longer term trend.
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The failure of the Fed to be as hawkish as expected is good news for the dollar, especially if U.S. payrolls Friday add to the view that the recovery is glacial and that investors will continue to seek safe havens.
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Equities seem to be pricing in a normal recovery. But normal recoveries tend to be accompanied by much stronger GDP growth than economists are expecting for the coming year. A normal recovery growth rate could see a sharp unwind of central bank policy. Which would do some serious damage to both s...
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