* Dollar index down 0.4 pct at 74.70 .DXY
* UAE central bank action seen providing stability
* Yen slips broadly on Japan govt ministers’
(Updates prices, adds comment and quote)
By Tamawa Desai
LONDON, Nov 30 (Reuters) – The dollar fell on Monday after
the United Arab Emirates said it would stand behind banks in
Dubai, soothing some concerns about a looming debt default.
But investor confidence remained fragile, with the dollar
briefly trimming losses after a top Dubai financial official
said the Dubai government does not guarantee Dubai World debt
and Dubai World creditors carry responsibility for their
actions. [ID:nGEE5AT12X]
European shares were down 1.1 percent by midday trade
.FTEU3, while U.S. stock futures were slightly lower SPc1.
The dollar’s decline was initiated earlier in the global day
as Asian equities rallied on the UAE central bank’s pledge to
provide emerging support to the region’s banks and as Dubai’s
oil-rich neighbour, Abu Dhabi, offered to provide selective
support to Dubai companies. [ID:nGEE5AS0AH]
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“The failure at the end of last week of the dollar to break
the down trend that had been in place since March has seen the
dollar slide back,” said Michael Hewson, analyst at CMC Markets.
By 1211 GMT the dollar index, a gauge of the greenback’s
performance against six other major currencies, was down 0.4
percent on the day at 74.70 .DXY, back within sight of a
15-month low of 74.170 struck last week.
The euro rose 0.4 percent to $1.5030 EUR=, just over a
cent away from last week’s 15-month peak just above $1.5140, and
the Australian dollar was up two thirds of a percent at $0.9130 AUD=D4.
YEN LOWER, JAPANESE AUTHORITIES SPEAK UP
The yen also weakened, after a Japanese government minister
said the government has agreed to try and stem the currency’s
rise, although he didn’t specify what measures they might be.
“In light of the Dubai shock, we want to respond more
aggressively than originally planned with an extra budget,”
strategy minister Naoto Kan, who is also deputy prime minister,
told reporters. “We also want to stop the yen’s rise and
cooperate with the BOJ.” [ID:nnT77759]
Finance Minister Hirohisa Fujii denied a media report saying
he would not intervene in currency markets, saying he had never
said intervention was impossible. [ID:nnTKZ006320] Separately,
Bank of Japan Governor Masaaki Shirakawa said currency
volatility was undesirable. [ID:nTKZ006320] Continued…
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