Market Overview by Windsor Brokers Cyprus.

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Currencies

The USD resumed its slide and fell to record lows against the Euro on Wednesday amid growing pessimism over the ffice:smarttags" />U.S. economy.

Demand for the currency fell further after data showed the country's service sector contracted for a second straight month in February.

Also on Wednesday, U.S. Treasury Secretary Henry Paulson told policy-makers that while the economy would likely continue to grow, risks were to the downside, adding to mounting fears of an economic recession.

EUR/USD rose above 1.5300 for the first time touching off 1.5302 before the offers forced the pair back towards 1.5265 for the remainder of the session.

USD/JPY climbed to session peaks of 104.18 as U.S. stocks rebounded from Tuesday's losses. Investors showed little restraint against driving the USD to a new low against the Euro before Thursday's European Central Bank policy meeting which is expected to maintain its hawkish inflation rhetoric despite complaints this week by Euro-Zone finance minister that the Euro is overvalued against some currencies.

Energy

U.S. crude oil futures ended at a record settlement on Wednesday, lifted by a surprise drawdown on crude stocks last week.

Heating oil futures leaped more than 5 percent to a fresh high, with a larger-than-expected drop in distillate stocks.

Gasoline futures gained with the rest of the market, even though supplies rose to a fresh 14-year high.

Prices were already higher by more than $2 early as the Organization of Petroleum Exporting Countries left output unchanged and on news Venezuela had started moving tanks to the Colombian border.

On the New York Mercantile Exchange, April crude settled up $5 or 5.02 percent at $104.52 a barrel, trading from $99.55 to $104.64. The settlement erased the previous record of $102.59 hit on Feb. 28.

After settlement, prices further surged, hitting $104.95, eclipsing the previous intraday high of $103.95 reached on Monday. Prices fell $2.93 on Tuesday.

In London, April Brent crude settled up $4.12, or 4.22 percent, to a record $101.64 a barrel, moving from $97.52 to $102.07.

The U.S. Energy Information Administration said that for the week to Feb. 29, domestic crude stocks fell 3.1 million barrels to 305.4 million barrels, against analysts forecast for a 2.4 million barrel increase.

Imports declined while refinery runs rose much more than expected, combining to pull down supplies.

Gasoline stocks rose more than expected, by 1.7 million barrels to 234.3 million barrels, the highest level since they hit 234.5 million barrels in the week to Jan. 28, 1994.

Distillate stocks fell 2.4 million barrels to 117.6 million barrels, the lowest level since the week to April 27, 2007, when stocks logged in at 117.1 million barrels. Forecasters had expected a 1.9 million barrel decline.


Precious metals

Gold set an historic high near $1,000 an ounce on Wednesday, and silver jumped to a 27-year peak, as a record low dollar and strong oil triggered a fresh wave of bullion buying.

Spot gold rose as high as $991.80 an ounce, after slipping to a low of $959.45. It was at $985.70/986.50 at 19:15 GMT, against $963.20/964.00 in New York late on Tuesday, when it fell 2 percent with a drop in oil.

"The dollar's role as a reserve currency is being marginalized. It's becoming more of a localized currency," and that was very supportive to dollar-denominated gold, analyst said, adding: "We have to keep an eye on oil and the EUR/USD. As soon as the Euro moves up above $1.50, the market sees fresh speculative buying. We have a chance to see the $1,000-an-ounce level,"


Stock Indices

U.S. stocks rose on Wednesday as evidence the services sector may not be as weak as feared allayed investors' concerns about a recession and soaring commodity prices lifted energy and mining companies' shares.

Data on the U.S. services sector, which makes up roughly 80 percent of the economy, shrank less than expected, overshadowing a surprising decline in private-sector employment for February.

A startling drop in U.S. oil supplies lifted crude futures to a record in New York, boosting shares of oil companies, including Chevron Corp, whose stock jumped 2.4 percent.

Surging metal prices lifted shares of mining companies, including Freeport McMoRan Copper & Gold Inc, whose stock finished up 5.2 percent.

The Dow Jones industrial average ended up 41.19 points, or 0.34 percent, at 12,254.99 - snapping a four-day losing streak. The Standard & Poor's 500 Index finished up 6.95 points, or 0.52 percent, at 1,333.70. The Nasdaq Composite Index closed up 12.53 points, or 0.55 percent, at 2,272.81.

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