Currencies
The dollar tumbled to record lows against the Euro and a basket of key currencies on Tuesday after weak data added to worries over the ailing U.S. economy and a Federal Reserve top official signaled more interest rate cuts.
Compounding the dollar's woes was news that German corporate sentiment unexpectedly rose in February, suggesting that the European Central Bank was unlikely to ease monetary policy in the near-term.
That left investors focusing on interest rate differentials between the economy and a Federal Reserve top official signaled more interest rate cuts.
United States and the Euro zone. The Fed has lowered its benchmark overnight lending rate by 2.25 percentage points to 3 percent since mid-September, while the ECB's main refinancing rate has been held steady at 4 percent.
The Euro surged to an all-time peak of $1.4982, beating the previous record of $1.4966 touched on Nov. 23. It was last trading around $1.4965, about 0.9 percent higher on the day.
The dollar index, which tracks the greenback's performance against six major currencies, dived to a life-time low of 74.706, exceeding the previous record trough of 74.753 tested on Nov. 27.
The dollar was also hammered versus the high-yielding Australian and New Zealand dollars, which also benefited from firmer U.S. stocks. The Australian dollar rose 0.7 percent to US$0.9327.
The dollar came close to touching a record low versus the Swiss franc. It last traded down 1.3 percent at 1.0755 Swiss francs.
Analysts saw little respite for the dollar on Wednesday, with Fed Chairman Ben Bernanke scheduled to speak before the House Financial Services Committee. Economic reports due for release include January durable goods and new home sales.
Energy
U.S. crude oil futures extended gains in post settlement trade on Tuesday to hit a record intraday high above $101, pressured by a weak dollar.
On the New York Mercantile Exchange, April crude hit $101.43 a barrel, leaping $2.20, or 2.2 percent, the highest price for a front-month contract since NYMEX launched crude futures in 1983. The previous record was $101.32 reached on Feb. 20.
April crude earlier settled at a record $100.88, having gained $1.65, or 1.66 percent, and beating the previous peak of $100.74 hit on Feb. 20. Prices have risen for the eighth time in nine sessions.
In London, April Brent crude jumped to a new high of $100.03 a barrel, gaining $2.34, or 2.4 percent. It earlier settled up $1.78, or 1.82 percent, at $99.47 a barrel.
Russia's ability to interrupt supplies to Europe and former Soviet republics, Venezuela's dispute with Exxon Mobil, turmoil in Nigeria, Iran's dispute over its nuclear program and Turkey's incursion into Iraq all remained supportive factors.
Traders were waiting to see what the Organization of Petroleum Exporting Countries will do about production policy at its March 5 meeting.
Poll of analysts predicted crude supplies last week rose for a seventh straight week, by 2.5 million barrels. Gasoline stocks were seen up 300,000 barrels while distillate supplies were expected to have dropped 2.1 million barrels.
Precious metals
Gold finished higher on Tuesday, resuming its rally as crude oil rose, the U.S. dollar slid and a report showed rising U.S. producer prices.
But the market remained wary of the possibility that the International Monetary Fund (IMF) might sell a part of more than 3,000 tons of gold it holds.
Silver hit a 27-year high as investors considered it relatively cheap against other precious metals, analysts said.
Spot gold closed at $946.60/947.40 by New York's last quote at 19:15 GMT, up from $937.80/938.60 in New York on Monday and off last week's record high of $953.60. During the session, it fell as low as $926.40 and reached a high of $948.50.
The United States said it supported sale of a limited portion of the IMF's gold stocks and was confident Congress would support the move. The U.S. Treasury had resisted seeking Congressional approval.
The IMF is the world's third-largest gold holder, with 3,217 tons of reserves. Any sale of IMF gold might be done in accordance with a European Central Bank gold accord, which limits total gold sales to 500 tons a year, analysts said.
Stock Indices
U.S. stocks rose for a third day on Tuesday as technology companies gained on IBM's IBM.N plans to buy back $15 billion of its shares and the energy sector advanced on a record high close for oil in New York.
International Business Machines Corp. said the repurchases, equal to about 10 percent of its market capitalization, could boost 2008 earnings per share. The broader market responded favorably to the computer service company's confidence it could continue to generate cash in a difficult economy.
The Dow Jones industrial average was up 114.70 points, or 0.91 percent, at 12,684.92. The Standard & Poor's 500 Index was up 9.49 points, or 0.69 percent, at 1,381.29. The Nasdaq Composite Index was up 17.51 points, or 0.75 percent, at 2,344.99.
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