CHINA

Stock index futures dipped on Tuesday as investors reassessed a vow by China for more flexibility on its currency and turned cautious ahead of data expected to show a slight rise in U.S. home sales.

Stock index futures dipped on Tuesday as investors took a more cautious view over China's vow of more yuan flexibility, while data on home sales was on tap later in the morning.

Stock index futures pointed to a lower open on Wall Street on Tuesday, with futures for the S&P 500 down 0.4 percent, Dow Jones futures down 0.3 percent and Nasdaq 100 futures down 0.4 percent at 0930 GMT.

China on Tuesday stuck to its guns on the pace of exchange rate reform, reaffirming that change must remain gradual and controllable.

Two state legislatures, Connecticut and Minnesota, have recently voted into law bills that regulate the amount of cadmium in children's jewelry.

Weaker commodity stocks and banks pushed Britain's top share index lower early on Tuesday, after gains in the previous session, as confidence prompted by China's decision to give its currency more flexibility faded.

Dollar funding costs edged higher on Tuesday as China's yuan slipped, dashing bets that Beijing may allow it to appreciate more rapidly after a pledge to make the currency more flexible.

Asian stocks and commodities retreated on Tuesday as wary investors took profits from a rally ignited by China's weekend decision to give its currency more flexibility.

Oil fell as much as 1.1 percent to below $77 on Tuesday on speculation that a gradual appreciation of the yuan would have a limited impact on China's petroleum imports in the short term.

South Korea plans to lower eventually the ceiling on currency derivatives for branches of foreign banks, bringing it at par with that imposed on domestic banks, a senior finance ministry official said on Tuesday.

Gold gained on Tuesday after China's central bank raised the yuan's mid-point, spurring early buying in the euro that encouraged bargain hunting after bullion dropped sharply from a record high the previous day.

The euro retreated from a one-month high against the dollar on Tuesday, tracking a pullback in the yuan a day after China pledged to allow its currency to trade more freely.

The euro slipped on Tuesday, giving back gains made after China set the yuan's mid-point at its highest since the yuan's revaluation in 2005, as players wondered how fast the Chinese authorities would let their currency rise.

Gold prices extended gains in Asian trade Tuesday as the euro surged after China's central bank set the yuan's daily mid-point at a record high, against the dollar, in five years.

Gold prices have once again climbed to record levels of $1264 last week before correcting on profit taking thereby cementing the appeal of the yellow metal as a safe haven for investors. China announced its move toward a more flexible currency exchange rate mechanism which has improved the investor sentiments in general but the softening of the dollar has helped the recent surge in gold prices to record levels.

Asian stocks retreated on Tuesday as investors booked profits a day after China's weekend decision to give its currency more flexibility triggered a risk rally.

China pulled back the veil on its new currency regime a little further on Tuesday, appearing to engineer a fall in the yuan to make clear its vow of flexibility did not include one-way bets for appreciation.

China's yuan jumped on Tuesday to its highest level since the currency was revalued in 2005 as the central bank signaled it would tolerate yet further gains to make good on its vow for more foreign exchange flexibility.

Asian markets waited with bated breath Tuesday to see how far Beijing would go in allowing its currency to strengthen, a litmus test of just how flexible the Chinese authorities are prepared to be to meet U.S. demands.

China's signal it will let its yuan currency appreciate is good news for global manufacturers and resource companies that supply the world's third-biggest economy with the equipment and commodities it needs to fuel growth.

Commodity currencies rallied on Friday, with the Aussie advancing to a new monthly high reaching 0.8712 USD.