(Adds European outlook, updates prices)
By Rafael Nam
HONG KONG, Feb 27 (Reuters) - The dollar sank to a record
low against the euro on Wednesday after surprisingly weak U.S.
economic data, but Asian stocks hit a six-week high on optimism
corporate earnings will weather the difficult global economic
environment.
Commodities and metals climbed on the back of the weaker
greenback, with oil holding near a record peak above $101 a
barrel. Gold surged to a record high, driven as well by a
search for a hedge against inflation.
European shares also expected to open modestly higher on
ahead of a stream of earnings including British mortgage lender
HBOS <HBOS.L> and French construction group Bouygues <BOUY.PA>.
The dollar broke through the key psychological $1.50 level
against the euro for the first time, and hit an all-time low
against a basket of currencies, after data on Tuesday showed
U.S. consumer sentiment at a five-year low and consumer
expectations at their worst in 17 years. []
A separate report showing rising inflationary pressures
further spooked investors. The dollar's decline was then sealed
after the Federal Reserve's No.2 official reinforced views that
U.S. interest rates will continue to be cut. []
"Weve just gone through a major psychological level, so the
market is considering where the euro's next ceiling will be,"
said Hideaki Inoue, a forex manager at Mitsubishi UFJ Trust and
Banking.
The euro <EUR=> rose as high as $1.5050 on electronic
platform EBS, its highest level since the single currency was
introduced in 1999, and was trading at $1.5007 by 0610 GMT.
The dollar index <.DXY> fell to a record low 74.509, while
Asian currencies such as the Singapore dollar, the Malaysian
ringgit and the Thai baht hit new decade highs.
The dollar was more steady against the Japanese yen.
ASIAN STOCKS GAIN
Asian stock markets posted a third consecutive day of
gains, after IBM's <IBM.N> $15 billion share buyback
announcement on Tuesday raised confidence the corporate sector
will weather the difficult global economic environment.
The MSCI's index of Asian stocks outside Japan
<.MIAPJ0000PUS> surged 2.4 percent after earlier hitting its
highest since Jan. 16. The index had already climbed 2 percent
over the previous two sessions.
Markets in Australia <>, Taiwan <>, China <>
and India <> were up nearly 2 percent each. South Korea
<> rose 0.7 percent to a five-week high, while Singapore
<.FTSTI> stocks were up over 1 percent.
Japan's Nikkei index <> rose 1.5 percent to a six-week
closing high, on a broad-based rally that included blue chips
and financials.
Hong Kong <> shares were up 3.7 percent after the
region unveiled a budget that included tax concessions and
handouts. Asia-focused Standard Chartered <2888.HK> surged 8.4
percent a day after posting 2007 earnings that beat forecasts.
The diverging views between stock and currency markets come
as stagflation fears are creeping among some quarters, as signs
of a struggling U.S. economy are being accompanied by a trend
of higher inflation.
Federal Reserve Vice Chairman Donald Kohn said on Tuesday
that a weak U.S. economy was a bigger worry than higher
inflation risks, suggesting a willingness to cut U.S. interest
rates.
Investors are likely to thus scrutinise Fed Chairman Ben
Bernanke's appearance later in the day at the U.S. Congress.
COMMODITIES SHINE
The weakening dollar also sparked another surge in
commodities and metals. Gold <XAU=> roared to a historic high
of $955.40 an ounce, well above the $946.60/947.40 seen in late
U.S. trade. Bullion prices have risen more than 14 percent so
far this year.
Silver spot prices <XAG=> rose to $19.19/19.24, trading at
its highest levels since December 1980, while palladium <XPD=>
at one point hit a 6-
