(BN) Dollar Approaches One-Month High as Stocks, Oil Fall; Treasuries Rebound

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Market is turning around the corner. Stonger dollar vs yen and stronger won vs dollar. Gold stay 

Dollar Near Month High as Asian Stocks, Oil Fall for Third Day

Nov. 16 (Bloomberg) -- The dollar traded near the strongest in more than a month against the yen and euro while Asian stocks and oil fell for a third day amid increasing signs policy makers will act to control inflation as the global recovery strengthens.

The MSCI Asia Pacific Index slipped 0.1 percent to 131.54 as of 11:52 a.m. in Tokyo. Oil lost 0.4 percent, set for the first three-day drop since Sept. 17. Treasuries climbed, snapping the steepest two-day selloff since January 2009. The South Korean won rallied against all 16 major counterparts.

The Bank of Korea raised interest rates for the second time this year and Australia's central bank said this month's rate increase was "prudent" given the outlook for inflation. A newspaper report said China will introduce measures to control rising food prices. The Federal Reserve isn't trying to weaken the dollar or push inflation higher than 2 percent with its bond-buying program, Vice Chairman Janet Yellen told the Wall Street Journal before the release of data this week that may show gains in producer and consumer prices.

"While inflation still isn't a major concern for the Western world, it really is coming to the forefront in the emerging markets," said Ivan Leung, chief investment strategist at JPMorgan Private Bank in Hong Kong. "The recovery next year may well look very similar to this year, with the U.S. continuing to be in a soft patch even though there are signs that things are stabilizing while Europe continues to work through its systemic issues."

The dollar traded at 83.06 yen from 83.07 yen in New York yesterday, when it reached 83.27, the highest level since Oct. 6. The greenback was at $1.3617 per euro from $1.3587, after earlier trading at $1.3562, the strongest since Sept. 30. Against the U.S. currency, South Korea's won strengthened to 1,125.95, gaining for the first time in three days, after today's rate increase.

U.S. Recovery

U.S. industrial production increased 0.3 percent last month after dropping 0.2 percent in September, according to a Bloomberg News survey of economists before today's report. Retail sales rose 1.2 percent in October, the most in seven months, Commerce Department data showed yesterday.

A Labor Department report tomorrow may show prices for goods and services, excluding food and energy, rose 0.7 percent in October from a year earlier, according to a Bloomberg survey. That would be the smallest year-over-year gain since 1961. Data today may show that producer prices rose 0.8 percent last month.

The yield on benchmark 10-year Treasuries fell two basis points to 2.94 percent in Tokyo, according to data compiled by Bloomberg. The yield had increased 31 basis points over the previous two trading days, the most since a back-to-back surge of 33 basis points 21 months ago.

Stocks Slump

The MSCI Asian index fell to its lowest level since Nov. 3. Concern over increasing policy tightening sent South Korea's Kospi index lower by 0.7 percent and dragged the Shanghai Composite Index down 0.5 percent. China Vanke Co. dropped 1.6 percent after the government ordered first-time foreign homebuyers to show proof they don't own other properties.

Hyundai Merchant Marine Co. plunged 15 percent after parent Hyundai Group was named the preferred bidder for a controlling stake in Hyundai Engineering & Construction Co. Hyundai Engineering also tumbled 15 percent.

Copper led a decline in commodities on concern that China, the world's biggest metals consumer, may take further steps to tighten monetary policy to cool inflation. Copper for three- month delivery declined 0.4 percent to $8,610 a metric ton in London. Crude oil fell to as low as $84.24 a barrel on the New York Mercantile Exchange after retreating to $84.86 yesterday.

To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net .

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