Crude oil extends the retreat last Friday to 51.4 as excitements about the US government's rescue plans faded. Also pressured the market are declines in stock markets and release of worse-than-expected industrial production data in Japan.
In Asia, stocks slide for the first time in 6 days with the MSCI Asia Pacific Index lost 2% and Japan's Nikkei 225 Stock Average plunged 1.8%. Mitsui Fudosan, the largest real estate developer in Japan, plummeted 5% after another developer, Azel Corp, announced bankruptcy. Financial stocks also sank with Mizuho Financial Group losing 6%.
Industrial production in Japan dropped -9.4% mom in February, compared with market expectation of -9.1% and -10.2% in January. This was the 5th consecutive monthly fall as global economic recession caused severe contraction in Japan production activities. On annual basis, the decline was -38.4%, worse than -31% in the previous month.
Continue trading narrowly above 920, gold price changes little in Asian morning. Although renewed worries about global economic outlook may shift funds from the equity markets, the funds are probably driven to the dollars, instead of gold, as shown in the strong rebound in the USD.
The dollar index surges for the 3rd trading day to 85.35 as investors exit trades in higher-yield currencies on economic concerns. Last Friday, the dollar index rallied more than 1% after Germany's finance minister said that long-term stability of the euro will be threatened if other EU members do not limit spending. The euro extends weakness against the dollar and is currently trading at 1.363 on Monday.