The dollar strengthened, Asian and European stocks rose and copper climbed to a record on optimism an economic recovery will be sustained in the U.S., helping drive global growth as expansion moderates in China. The dollar gained against 12 of its 16 major counterparts and climbed to $1.3274 per euro as of 4 p.m. in Hong Kong, from $1.3384 on Dec. 31. The MSCI Asia-Pacific excluding Japan Index jumped 0.9 percent to 483.16, poised for its first six-day gain since July, while South Korea’s Kospi index closed at a record high. The Stoxx Europe 600 Index added 0.8 percent while futures on the Standard & Poor’s 500 Index rose 0.2 percent. Copper advanced as much as 1 percent on the Comex in New York. U.S. data this week will likely show employment increased for a third month and growth accelerated in the nation’s factories and services. In Asia, a Jan. 1 report showed China’s purchasing managers’ index fell for the first time in five months, suggesting government efforts to cool the economy are working, while Singapore’s trade ministry said today its economy grew at a slower-than-forecast pace in the fourth quarter. Growth will “definitely normalize in 2011 in emerging markets,” Arjuna Mahendran, the Singapore-based head of investment strategy for Asia at HSBC Private Bank, said in a Bloomberg Television interview. “On the other hand, we could see the U.S. economy in particular acting as a laggard in terms of surprising us on the upside.” The Dollar Index, which tracks the U.S. currency against those of six trading partners, rose 0.5 percent, on course for its biggest gain since Dec. 15. Nonfarm payrolls increased by 140,000 in December, according to the median forecast of economists surveyed by Bloomberg News before a Labor Department report on Jan. 7. Factories, Services Separate polls suggested data from the Institute for Supply Management this week will show U.S. manufacturing expanded in December at the fastest pace in seven months and growth in services industries, which make up about 90 percent of the economy, was the quickest since May 2006. “In the U.S., not just the employment market is improving, but other areas, such as corporate earnings and manufacturing, are looking pretty strong,” said Chris Leung, a Hong Kong-based fund manager at Haitong International Asset Management, which oversees about $400 million. “We are fully invested right now. For the second half of this year, we’re pretty bullish.” The greenback’s gain today against the euro was the biggest in two weeks as concern Europe’s sovereign-debt crisis will linger damped demand for the region’s assets. The shared currency weakened against 15 of its 16 major counterparts. Europe’s Imbalances The likelihood the euro area will exist in its current structure in a decade is 20 percent as governments fail to take sufficient measures to tackle economic imbalances, the Centre for Economics and Business Research said. The region will have another debt crisis by this spring, when Spain and Italy have to refinance more than 400 ($533 billion) of bonds, CEBR Chief Executive Douglas McWilliams forecast on Dec. 31. South Korea’s won gained 0.8 percent to 1,126.25 per dollar and Malaysia’s ringgit rose 0.4 percent to 3.0655 from their Dec. 30 closing levels, the last day of trading in the two nations’ financial markets. Regional currencies are strengthening on speculation policy makers will be more tolerant of appreciation as inflation gathers pace. Thailand, the Philippines and Taiwan will this week report consumer-price data for last month. Prices in Indonesia rose 6.96 percent last month from a year earlier, the most in 20 months, the Central Bureau of Statistics said in Jakarta today. South Korean inflation accelerated to 3.5 percent in December, from 3.3 percent the previous month, the government reported Dec. 31. Trade figures released a day later showed export growth unexpectedly picked up in December, also supporting today’s advance in the won. Slowing Growth The Chinese purchasing managers’ index fell to 53.9 in December from 55.2 the previous month, missing all 13 estimates in a Bloomberg survey of analysts, after the government tightened monetary policy and closed energy-wasting and highly polluting factories. Readings above 50 signal expansion and the median forecast was 55. Singapore’s gross domestic product rose an annualized 6.9 percent in the three months through Dec. 31 from the previous quarter, when it contracted a revised 18.9 percent, the trade ministry said today. The median forecast of economists surveyed by Bloomberg was for a 9.4 percent expansion. About three stocks rose for each that declined on the MSCI Asian index. Hong Kong’s Hang Seng Index gained 1.7 percent, while the Kospi index rose 0.9 percent. Markets in Japan, Australia, China and Thailand were closed for a holiday. Hynix, Jiangxi Copper Hynix Semiconductor Inc. jumped 5.4 percent in Seoul, pacing gains among exporters. Korea Zinc Co. and Jiangxi Copper Co. rose more than 3.5 percent, leading a rally among commodity producers. Copper traded at $4.4865 a pound in New York after earlier rising to an all-time high of $4.4925 a pound. The metal rose 33 percent in 2010, posting an annual increase for the eighth time in nine years. Futures also closed on Dec. 31 at a record on the London Metal Exchange, which will be shut for a holiday today. Gold declined after last year’s rally, the 10th straight annual advance, prompted some investors to sell and as demand dropped on a strengthening dollar. Bullion for immediate delivery fell as much as 0.5 percent to $1,414.15 an ounce before trading at $1,418.35. Crude oil advanced 0.2 percent to $91.57 a barrel on the New York Mercantile Exchange, after climbing 15 percent in 2010. Global oil use will increase 1.7 percent to a record 87.8 million barrels a day this year, and output will rise 0.9 percent, according to the U.S. Energy Department. To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net. To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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