CHINA

LONDON (Reuters) - The euro hit a one-month high against the dollar on Wednesday while higher-yielding currencies trimmed losses from the previous day as investors concluded China's surprise monetary tightening would not derail growth.

Google's announcement that it may quit China over censorship and hacking drew applause, warnings and bouquets from dissidents and Internet activists on Wednesday, with few seeing much chance of the wary government giving ground.

Google Inc threatened to quit China, the world's biggest Internet market, warning it would no longer tolerate strict censorship of its Google.cn search engine.

China's monetary tightening and disappointing corporate earnings put downward pressure on world stocks on Wednesday, combining to present investors with two of their biggest concerns.

Internet giant Google Inc has made a shock threat to quit China, the world's biggest Internet market by users, after hackers accessed human rights activists' e-mail accounts.

Chinese stocks led a drop in Asian equities on Wednesday as Beijing's surprise hike of banks' reserve requirements sparked investor concerns that the move could slow the country's purchases of natural resources and other imported goods from Asia.

Google Inc may pull out of China because of censorship and cyber attacks on rights activists, further straining Sino-U.S. relations as Washington prepared to tackle global Internet censorship.

Stocks and commodities fell in Asia on Wednesday after China's surprise hike of banks' reserve requirements sparked investor concerns that the move could slow China's purchases of natural resources and other imported goods from Asia.

Google Inc said it may pull out of China because it is no longer willing to accept censorship of its search results, in a surprise retreat from the world's largest Internet market by users.

The Canadian dollar fell against the U.S. currency on Tuesday after data showed the country's trade balance unexpectedly slipped into deficit in November, raising worries about the health of the recovery.

The United States and Google Inc separately said they would move against Chinese Internet censorship, possibly signaling the start of a harder line toward China by U.S. President Barack Obama and the end of Google's business in the country.

Google Inc is considering shutting down its China operations and website after hackers in China coordinated a highly sophisticated cyber-attack on the Internet search giant in December and targeted at least a score of other major corporations, it said on Tuesday.

Google, Inc executives in the U.S. have ordered a review of the search giant's operations in China and are considering shutting its local site and offices there if talks with the Chinese government about having an unfiltered search engine within the law fall through.

The U.S. trade deficit ballooned in November, as the price of imported oil jumped more than $5 per barrel and revived consumer and manufacturer demand pushed imports to their highest in nearly a year.

The president of the world's largest money manager, BlackRock Inc , said on Tuesday that emerging markets are a bright spot for investment and warned U.S. real estate prices are likely to fall further.

Sino-Forest Corp on Tuesday said it acquired Homix Ltd, a Chinese company engaged in research and development and manufacturing of wood products, for about $7.1 million, sending the forest operator's shares to a two-year high.

The Canadian dollar is continuing to reverse the gains it made in the first week of 2010 against the dollar. The Canadian dollar rose from a low of 1.0576 on December 30 to a high of 1.0249 yesterday at 3 a.m. London time on rising stock and oil prices and prospects of a worldwide economic recovery.

North Korea will not return to nuclear disarmament negotiations unless the United States agrees to peace treaty talks and lifts sanctions, a senior North Korean diplomat said on Tuesday, leaving little room for compromise.

The U.S. trade deficit ballooned in November, as the price of imported oil jumped more than $5 per barrel and as revived consumer and manufacturer demand pushed imports to their highest in nearly a year.

China's second-largest online game company Shanda Games made its first U.S. acquisition on Tuesday, buying online game firm Mochi Media for $80 million, to advance its global ambition and consolidate its position in an increasingly competitive Chinese market.

China took its strongest step toward tightening monetary policy on Tuesday as the world's third-largest economy roars ahead, surprising investors with an increase in banks' required reserves that rocked global financial markets.