* Asian stocks drift lower on profit-taking
* Dollar holds nears two-month highs vs euro
* Strong dollar put pressures on oil, commodities prices
By Kevin Yao
SINGAPORE, Dec 14 (Reuters) - Asian stocks eased on Monday
as the dollar hovered near six-week highs on views the Federal
Reserve might raise rates sooner than expected, putting
pressure on oil and commodity prices.
Regional shares posted steep gains on Friday after a slew
of Chinese data showed the world's third-largest economy
remained on a brisk recovery path.
But the positive sentiment failed to carry over on Monday,
as the dollar's strength led investors to pull funds out of the
region.
"As the U.S. dollar strengthens, naturally Asian markets
are coming off," said Daphne Roth, head of Equity Research at
ABN Amro private banking in Singapore, pointing to a inverse
correlation between the dollar index and Asian stocks.
"But I believe it's profit-taking. It's not the beging of a
downtrend," she said.
The MSCI index of Asia Pacific stocks outside Japan fell
almost 0.9 percent <.MIAPJ0000PUS>.
Asian stocks have rallied more than 60 percent this year.
The Thomson Reuters index of Asia ex-Japan equities was
also down 0.9 percent <.TRXFLDAXPU>.
The dollar index <.DXY> hovered near 6-week highs, while
the euro struggled at $1.4630, not far from a two-month low of
$1.4587 <EUR=> struck on Friday. It has fallen more than 3
percent since hitting a 16-month high above $1.51 in November.
The dollar rallied on Friday while Wall Street stocks
mostly rose after U.S. retail sales posted the largest advance
since August last month, while consumer sentiment improved
sharply in December.
The Fed is likely to keep rates unchanged near zero after a
a two-day meet starting on Tuesday. Investors are focused on
the accompanying statement to see if the Fed reiterates a
dovish bias despite the recent run of strong data.
Many analysts expect the dollar to trade lower on views the
Fed will lag other central banks in tightening policy given
tame price pressures, suggesting the dollar will remain a
funding currency for carry trades.
"We do not expect this dollar strength to last," said
Callum Henderson, chief global currency strategist at Standard
Chartered Bank.
"Those riskier assets will need a currency to fund them and
that currency is the U.S. dollar as such, we expect dollar
gains to reverse once the market reassesses the fundamental
impact of this data," he said.
Meanwhile, U.S. crude futures falling as much as $1 to
below $69 a barrel, extending declines into a ninth day, hurt
by worries over high oil inventories and a stronger dollar.
NYMEX crude for January delivery <CLc1> was down 68 cents
at $69.19 barrel by 0228 GMT.. On Friday, it settled down 67
cents, marking an eighth straight session of losses.
Gold prices edged up to 1,120 per ounce but still hovered
near four-week lows hit the previous session as the dollar
remained firm against a basket of major currencies.
(Editing by Kazunori Takada)
