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Euro hits nine-month low as Greek, Dubai debt worries persist

Stocks in Europe and emerging economies post gains. Markets in the U.S., China, Taiwan, Hong Kong, Singapore, Brazil and Malaysia are idle for holidays.

February 16, 2010|Times Wire Services

The euro declined on world markets Monday, nearing a nine-month low against the dollar, on a revival of worries about debt woes in Greece and Dubai.

But stocks in Europe and emerging markets gained.

U.S. markets were closed for Presidents Day, and exchanges in China, Taiwan, Hong Kong, Singapore and Malaysia were shut for the Lunar New Year holiday. Brazil's market was closed for Carnival festivities.

Metal prices rose after Goldman Sachs said China's growth was fast enough that the government might let the yuan strengthen as much as 5% to curb inflation.

A stronger yuan would make metal imports more attractive to Chinese industrial buyers. It would also be good news in general for U.S. companies competing with Chinese producers.

Copper climbed 1% in London trading after an 8.4% surge last week.

Beijing holds the yuan-dollar exchange rate to a tight range that has moved little since mid-2008.

In Europe, the debt problems afflicting Greece remained of interest to traders. Finance ministers from the 16 euro countries, gathering for a meeting in Brussels, faced investor pressure to explain measures agreed on last week to aid deficit-plagued Greece.

On Tuesday, finance ministers from all 27 EU nations will meet.

The euro fell Monday to $1.360 in London, down from $1.361 late Friday in New York. On Friday, the common currency reached $1.353, its lowest intraday mark since May 19.

But European stocks closed higher as the rally in metal prices boosted mining stocks. Commodity producers also helped push up emerging-economy stocks.

An index of stocks in Dubai, meanwhile, tumbled 4.8% on a report that state-owned Dubai World might offer its creditors 60 cents on the dollar after seven years.

Meanwhile, Japanese shares fell 0.8% on concern the country's deflation would persist, despite news that its economy expanded more than forecast in the fourth quarter.

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