By Gui Qing Koh
* Euro strikes new two-month low despite Ireland debt rescue
* Portugal and Spain may be in the crosshairs next
* U.S. stock futures up; gold a shade firmer
* Currency, bond investors doubt deal can contain crisis
By Koh Gui Qing
SYDNEY, Nov 29 (Reuters) - Doubts over whether a rescue
deal for debt-soaked Ireland can plug Europe's debt crisis
drove the euro to two-month lows on Monday, though shares in
Europe and Asia managed to move higher.
Even though European authorities agreed to lend Ireland 85
billion euros ($115 billion) on Sunday in the hope it would
assure investors that all European nations can repay their
debts, markets were sceptical that the deal would stave off
further contagion. []
Asian stocks struggled most of the day but drew some
comfort from a firmer start in Europe, where leading European
shares rose 0.8 percent in early trade.
The euro fell as low as $1.3183 in Asia as
investors worried European authorities might not have the
means to rescue all fiscally-poor European nations including
Portugal and especially Spain, whose economy is much bigger
than Ireland's.
"There are still lingering worries about the rest of the
countries, including Portugal and Spain," said Lorraine Tan,
the director of Asian equity research at Standard & Poor's.
"It does raise risk worries and there are less people
willing to take risk at this stage."
Indeed, many Asian investors said they wanted to wait
and see how U.S. and European markets take to the rescue deal
before making any big moves.
----------------------------------------------------------------
A late 1.3 percent spurt in Hong Kong's share index
helped to lift the MSCI Asian stock index outside Japan
0.9 percent higher by late afternoon.
Japan's Nikkei also rose 0.9 percent to a
five-month high. But traders noted the Tokyo market was
thin, suggesting buyers were prudent nonetheless, especially
with tensions between the two Koreas still bubbling.
[]
U.S. stock futures were buoyant, with S&P 500 futures
<SPc1> up 0.9 percent, driven higher in part by a healthy
start to the Christmas shopping season.
EURO UNDER PRESSURE, FLIGHT TO DOLLARS
The euro recouped some losses by late trade in Asia to
stand at $1.3280, but was still some way below a high of
$1.3345 struck after the Irish aid was announced.
[]
The U.S. dollar, considered a safer asset because it is
widely traded, initially benefited from the shift from risk.
The dollar index hit a two-month high of 80.652
before pulling back in late trade to 80.101. On the yen
, the U.S. currency held near a two-month peak.
The reaction in the commodity markets were more mixed.
Oil <CLc1> brushed aside the firmer dollar to rise past
$84 per barrel as some thought the Irish deal bode well for
energy demand.
Copper prices, an essential ingredient for industrial
work, were steady while iron ore prices hovered at
6-1/2-month peaks. Iron ore is needed to make steel
and is considered a barometer for the state of economic
activity.
Gold, on the other hand, which tends to be in demand when
investors shy away from risk, was a shade firmer at $1,363.19.
(Editing by Kim Coghill)
(Guiqing.Koh@ThomsonReuters.com; Reuters Messaging;
guiqing.koh.reuters.com@reuters.net; +61 2 9373 1821))
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