World stocks and oil slip, US dollar gains

(Getty Images)

Global stocks and crude oil ended lower on Monday, on fresh concerns about economic recovery, helping to revive a safety bid for the US dollar.

The US dollar bounced from 14-month lows seen last week on speculation that a credit for first-time US homebuyers will be phased out. Investors have also scaled back commodity holdings after a rally for raw goods.

Gold prices fell to a two-week low as the dollar rebounded, with weak physical demand for the precious metal also weighing.

The dollar turned around after earlier struggling in the wake of a report saying China should increase its holdings of euros and yen in its foreign reserves.

Diversification of China's $2.27 trillion stockpile of foreign exchange reserves is a long-standing policy, a senior central banker in Beijing said.

The euro fell to session lows just below $1.49 after earlier hitting a 14-month high at $1.5064.

Crude oil slid more than 2.0 percent, below $79 a barrel, after trading as high as $81.58.

"You do have an overall reversal in risk appetite," said Samarjit Shankar, managing director of global FX strategy at BNY Mellon in Boston.

"It's primarily a lot of profit-taking on long risk positions and some hesitation on the part of market participants ahead of the (third-quarter US gross domestic product) number that's going to come out this week," he added.

Investors felt uncomfortable pushing the euro higher given the huge amount of bearish trades on the dollar, suggesting a near-term recovery in the US currency is on the horizon.

Earlier in the day data unexpectedly showed German consumer sentiment declined for the first time in just over a year going into November. (Reuters)

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