* U.S. dollar hit 2009 low on fears about U.S. AAA rating
* Asian stocks head for 4.5 pct weekly gain, but doubts
grow
* Oil rebounds somewhat after Thursday's slide
By Rafael Nam
HONG KONG, May 22 (Reuters) - The dollar fell on Friday to
its weakest in almost five months against major currencies on
investor worries that the United States would lose its AAA
rating, though Asian stocks headed for a solid weekly gain.
The dollar's descent was sparked on Thursday when Standard
& Poor's cut its outlook on Britain's top rating to negative,
bringing into focus other AAA-rated countries that are running
into higher debt in an attempt to boost their economies with
big spending plans. []
Although signs of hope in the global economy are helping to
support Asian stocks, worries are also growing about the
strength of any recovery and whether the shift into riskier
asset such as oil is justified.
A weaker dollar is also strengthening Asian currencies,
which is bound to hurt the export-dependent continent and
further raise doubts among investors about whether a gain of
more than 50 percent in Asian shares excluding Jpaan since
early March is excessive.
"Markets all around the world appear to be looking for
direction, and any chance of a U.S. downgrade would really hit
U.S. assets such as the dollar and stocks," said Masayoshi
Okamoto, head of dealing at Jujiya Securities.
"For Japan, this situation comes just after earnings have
come out and companies have set their currency rates, many of
them at 95 yen. The chance of any further yen rise really
paints a gloomy picture."
The dollar index <.DXY>, a gauge of its performance against
six major currencies, fell as low as 80.257, its weakest since
late December and was last down 0.2 percent at 80.302.
The slide in the U.S. currency comes as investors are
finding it harder to ignore the effect of the Federal Reserve's
zero interest rate policy and its efforts to keep long-term
rates low through direct purchases of U.S. government debt.
The dollar slipped 0.3 percent from late U.S. trade to
94.08 yen <JPY=> after falling as low as 93.86 yen on trading
platform EBS, its lowest since mid-March.
The euro rose 0.4 percent to $1.3945 <EUR=>, its strongest
since early January. Sterling, despite the S&P action, rose as
high as $1.5893, its highest since early November according to
Reuters data, and was last up 0.2 percent at $1.5885 <GPB=D4>.
"S&P gave a clear criteria that a country whose government
debt burden is approaching 100 percent of GDP could have its
rating downgraded," said Hideki Amikura, deputy general manager
of forex trading at Nomura Trust and Banking.
"That prompted investors to think they should not be so
optimistic about credit rating on the United States."
But U.S. Treasuries recovered after concerns about debt
levels sent prices tumbling on Thursday. The Treasury's
announcement that it would sell $101 billion in notes next week
also sparked supply concerns. []
Benchmark 10-year U.S. Treasury notes <US10YT=RR> rose
about one point, sending yields down to 3.34 percent from the
3.37 percent level hit on Thursday that had marked the highest
yield on an intraday basis in nearly two weeks.
ONWARDS AND UPWARDS?
The worries about the United States' AAA rating are coming
at a time when data is pointing to a U.S. economic recovery,
but one bound to come as a long slog.
A factory index for the U.S. Mid-Atlantic area showed on
Thursday only marginally less weakness, while the Congressional
Budget Office said the economy will likely start growing again
in the second half of 2009, but with the jobless rate peaking
at more than 10 percent against 8.9 percent now.
[]
Surveys on Thursday also showed services and manufacturing
in the euro zone contracted less than expected in May as firms
saw the pace of decline in new orders ease, hinting the worst
of a deep recession may be over. []
But hopes for the global economy are being tempered by
concerns about corporate profits.
Shares in Chinese personal computer maker Lenovo <0992.HK>
lost 5.7 percent a day after posting a second consecutive
quarterly loss. []
In Japan, exporters' shares such as Canon <7751.T> fell
amid worries about the strengthening yen eating into profits
earned abroad, leaving the Nikkei average <> flat on the
day.
Elsewhere, the MSCI index for Asian stocks outside Japan
<.MIAPJ0000PUS> still rose 0.4 percent, putting it on track for
a about a 4.5 percent gain for the week.
The gauge hit a seven-month high on Wednesday, marking a 55
percent gain since the yearly low in early March.
Among other riskier assets, U.S. crude futures <CLc1> rose
46 cents to $61.51, recouping some of its 1.6 percent slide on
Thursday when investors had grown wary about recent gains..
Oil had hit a six-month peak above $62 a barrel on
Wednesday, when weekly U.S. government inventory data showed a
steep drop in crude and gasoline stockpiles ahead of the U.S.
Memorial Day weekend that marks the start of the summer driving
season. []
