* Dollar index near 14-year high after upbeat U.S. data
* Yen and euro pressured
* Emerging market central banks seen intervening
* Yuan near 7 per dollar level for first time since May 2008
* India's rupee, Turkish lira at record low after rate rise
* Prospects of China, U.S. inflation buoy copper, zinc
* Crude oil little changed amid OPEC meeting uncertainty
By Marc Jones
LONDON, Nov 24 The dollar surged to a near
14-year high before pulling back on Thursday, clocking up
records against a range of other top world currencies and
skittling emerging markets.
Stronger data from the world's biggest economy and thinner
volumes on the U.S. Thanksgiving holiday underpinned the
The dollar had eased off highs by midday after
pushing its way past more of last year's peaks against the euro
to reach $1.0515, with only the March 2015 high of $1.0457
standing in the way of a drive towards parity.
The yen had skidded to an eight-month low and China's
yuan to an 8-1/2 year low, while the highly sensitive
Turkish lira and Indian rupee hit new troughs.
"There doesn't seem to be anything stopping U.S. yields
going higher in the near-term so I think people are going to
stay on the dollar trend," State Street Global Markets' head of
global macro strategy, Michael Metcalfe, said.
"The only risk to this are that the dislocations in markets
outside of the U.S., particularly in emerging markets, get to a
point where they start to feed back into concerns (for the
Federal Reserve as it looks to raise interest rates)," he said.
In contrast to all the FX noise, European shares
saw a broadly quiet day, with most of the main bourses
inching up on gains from chemical and insurance
sector stocks but capped by weaker banks.
German business confidence data showed firms remained
unfazed, for now at least, by the U.S. election win for Donald
Trump and the political uncertainty bubbling in the euro zone.
However, the European Central Bank delivered an unusually
downbeat message, warning that global political shifts could
compound existing vulnerabilities to rising interest rates and
revive worries about the euro zone's weaker economies.
"This in turn could delay much-needed fiscal and structural
reforms and could in a worst-case scenario reignite pressures on
more vulnerable sovereigns," it said. "In particular, concerns
about debt sustainability might re-emerge despite relatively
benign financial market conditions."
It was enough to keep bond markets playing the transatlantic
divide that has been widening again on bets that, while the
United States may be about to raise interest rates, Europe is
probably unlikely to follow suit for a couple of years.
The yield on Germany's 10-year government bond, the
benchmark for the region, fell 2 basis points (bps) to 0.26
percent, while Italy, which has been plagued by political
concerns ahead of a referendum on constitutional reform,
outperformed with yields down 5 bps to 2.08 percent.
In the United States on Wednesday by contrast, the two-year
Treasury yield hit its highest since April 2010.
The firm dollar hit most emerging market currencies, with
China's yuan nearing the 7 per dollar level for the first time
since May 2008.
State banks or foreign exchange authorities in China, India,
Indonesia and the Philippines were all suspected of intervening
to slow the slide in their currencies, traders said.
Turkey's lira and India's rupee both sank to record
lows, though the lira clawed back some ground as its central
bank raised one of its benchmark interest rates for the first
time since 2014.
"Exchange rate movements due to recently heightened global
uncertainty and volatility pose upside risks on the inflation
outlook," the central bank's monetary policy committee said in
MSCI's broadest index of Asia-Pacific shares outside Japan
lost 0.4 percent, though the drop in the yen
lifted the export-orientated Nikkei in Tokyo to a near
Hong Kong's Hang Seng shed 0.2 percent while higher
metals prices lifted China's blue-chip CSI300 index
Oil prices were little changed amid all the dollar commotion
and ahead of a planned OPEC-led cut in crude production at a
meeting on Nov. 30.
U.S. crude was up 20 cents at $48.22 a barrel and
Brent was at $49.19.
Industrial metals remained red-hot on hopes of a revival in
U.S. manufacturing and infrastructure spending under Trump.
London zinc hit an 8-year high and copper jumped
for a fourth day in a row to put $6,000 a tonne within reach.
"Strong durable goods orders in the U.S. helped buoy
investors who have viewed Trump's upcoming presidency as a
positive for industrial metals demand," ANZ said in a report.
For Reuters new Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Melanie Burton in Melbourne and Balazs
Koranyi in Frankfurt; Editing by Louise Ireland)