Euro hits 6-wk high at $1.3158 , dollar index falls… ECB’s Stark comments cool rate cut expectations… SNB cuts rates by 50 bps, as expected… U.S. auto deal makes progress, rocky road seen in Senate

The euro hit a six-week high against a broadly weaker dollar on Thursday with doubts creeping in as to whether pent-up demand for the U.S. currency over the year-end will be as strong as previously thought.

Implied interest rate spreads also moved in the euro’s favor after European Central Bank Executive Board member Juergen Stark said late on Wednesday the bank did not have a lot of room for manoeuvre on rates after its cut last week.

Having climbed on a wave of risk aversion in recent months in tandem with the low-yielding Japanese yen, some analysts said further dollar demand into the year-end from deleveraging flows might be showing some sign of

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MSCI world equity index up 0.7 pct at 224.39… Euro rallies on doubts over deep rate cuts… Oil jumps 5 pct; government bonds fall

Firmer Asian, British and emerging market shares pushed world stocks to a one-month high on Thursday with the focus on the fate of U.S. automakers, while doubts over deep euro zone interest rate cuts boosted the euro.

Oil rose 5 percent, extending earlier gains, while the index of leading European shares fell. U.S. stock futures were pointing to a firmer open on Wall Street with investors focusing on the $14 billion plan to bail out the big three U.S. automakers.

The proposal passed the House of Representatives but its prospects looked grim in the Senate where supporters, who say the measure is necessary to avoid another jolt to an already contracting economy, struggled to keep it alive.

“Most of the bad news

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Global stocks decline as gloomy economic news flow resumes… Euro zone services activity falls to a fresh record low… Central banks expected to cut rates aggressively… MSCI World stock index down 0.4 percent

A tentative rebound in global stocks spluttered on Wednesday while euro zone government bond yields hit a three-year low as gloomy economic news highlighted the case for more aggressive interest rate cuts in Europe this week.

The euro stayed on the backfoot and oil held near a 3-1/2 year low a day before the European Central Bank, Bank of England and Sweden’s Riksbank are all widely expected to cut borrowing costs.

Supporting those expectations, economic reports on Wednesday showed the euro zone’s services economy fell deeper into recession in November than initially thought and inflationary pressures eased.

“This is a horrible survey across the board, showing that the euro zone service sector is being hit ever harder

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Brazil's state-owned National Supplies Co. will auction 55,000 metric tons of rice today, the country's ministry of agriculture said yesterday. The government currently has a stock of 1.4 million tons of rice, equivalent to 10 percent of Brazil's annual consumption. The stocks to be auctioned are held in Rio Grande do Sul and Santa Catarina states.The measure is an attempt to keep prices down and establish a reference price for rice, the statement said, citing Paulo Morceli, basic foods manager of Conab, as the supplies company is known. According to information on the Conab Web site, the rice will be auctioned at 28 reais ($16.98) for a 50-kilogram bag.The most recent decision of the Brzilian government is just one more example of the way national governments are coming under pressure to offer a response to what is now a global problem: the rising demand for energy ...