Dollar weakens as emerging stocks gain with Ruble, natural gas

The dollar weakened for a second day while European stocks and bonds rose. China led emerging equities higher as a date was set for an exchange link between Hong Kong and Shanghai, the ruble strengthened and natural gas jumped for a 10th day in the longest rally since 2000.

The Bloomberg Dollar Spot Index slipped 0.3 percent at 7:16 a.m. in New York, and Treasuries gained. The Stoxx Europe 600 Index added 0.3 percent and Standard & Poor's 500 Index futures were little changed. Shares in Shanghai jumped to an almost three-year high. The ruble climbed at least 1.9 percent against 31 major currencies as Russia vowed to take steps to curb speculators. Natural gas advanced amid forecasts for a blast of polar weather across the central and eastern U.S.

The dollar declined for a second day after the gauge reached the highest level since March 2009 last week. The Hong Kong and Shanghai bourses will allow trading on each other's venues from Nov. 17, regulators said today, giving foreign investors unprecedented access to China's $4.2 trillion equity market.

"We have very stretched positioning in the market," said Lutz Karpowitz, a senior currency strategist at Commerzbank AG in Frankfurt. "Speculative traders are in U.S. dollar-long positions so it's possible to see some sort of correction." A long position is a bet an asset's price will rise.

The U.S. currency weakened against all but one of its 16 main counterparts. The euro added 0.3 percent to $1.2488 and the yen gained 0.4 percent to 114.17 per dollar. Norway's krone climbed 0.7 percent against the euro after some inflation data exceeded economist estimates.

Emerging Markets

The MSCI Emerging Markets Index rose for the first time in six days, climbing 1.2 percent. A gauge of 20 developing-nation currencies advanced 0.5 percent, the most in a month.

The Shanghai Composite jumped 2.3 percent to the highest close since November 2011 and the Hang Seng China Enterprises Index of mainland companies traded in Hong Kong added 0.8 percent, the most this month. Bourses in the two cities will begin trading through the program, which allows a net 23.5 billion yuan ($3.8 billion) a day in cross-border purchases, on Nov. 17, regulators said in a joint statement today.

The yuan strengthened 0.1 percent versus the dollar after China's central bank raised its reference rate by the most since 2010.

Limit Funding

The ruble gained for a second day, advancing 3.1 percent, after central bank Governor Elivra Nabiullina said the currency's slide has gone too far and pledged to limit funding to ward of speculators. The currency has tumbled 27 percent this year.

The Micex Index rose 0.5 percent and the yield on 10-year government bonds fell nine basis points from a five-year high to 10.03 percent.

OTP Bank Nyrt., Hungary's largest lender, jumped 5.8 percent, the most in eight months, leading Hungarian stocks to the biggest gain since March after the government agreed with local lenders to convert billions of dollars of household foreign-currency mortgage loans at the market exchange rate.

Brazil's Ibovespa added 0.6 percent.

Two shares advanced for every one that declined in the Stoxx 600, with trading volumes 11 percent lower than the 30-day average, according to data compiled by Bloomberg.

Carlsberg A/S advanced 2.5 percent after Russia's biggest brewer posted quarterly profit above analysts' average estimate and said it has increased its market share in the country. Kabel Deutschland Holding AG gained 1.5 percent after reporting increases in sales and profit in its second accounting quarter.

As many as 68 companies in Europe report financial results this week. Analysts project that earnings at Stoxx 600 companies will increase 7.5 percent this year. That's higher than the 7.2 percent growth they projected in October.

Fugro NV jumped 33 percent. The Dutch deepwater-oilfield surveyor said it wants to continue as an independent company after Boskalis Westminster NV bought a 14.8 percent stake.

Serco Group Plc slumped 31 percent, the most on record, after the government-services provider cut its full-year earnings forecast, announced a rights-share sale and started renegotiating terms with lenders.

Italian bonds rose for a fourth day, pushing the 10-year yield three basis points lower to 2.35 percent. The rate on similar-maturity Spanish debt dropped two basis points to 2.13 percent. German securities were little changed with the 10-year yield at 0.82 percent.

Ten-year Treasury yields fell two basis points to to 2.28 percent.

Natural gas for December delivery rose as much as 3 percent to $4.544 per million British thermal units on the New York Mercantile Exchange. The U.S. government's Global Forecast System weather model showed Nov. 7 that temperatures will be as much as 15 degrees Fahrenheit (8 Celsius) below normal along a wide swath of the country from Nov. 17 through Nov. 21.

Brent crude rose, with December contact climbing as much as 1.9 percent to $84.97 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate oil jumped 1.5 percent to $79.85 a barrel in electronic trading on the New York Mercantile Exchange.

Gold for immediate delivery lost as much as 0.8 percent to $1,168.48 an ounce. Silver, platinum and palladium fell.