Commodity and Currency News from around the Web

Indonesian shares end morning higher, led by commodities stocks

Indonesian shares ended the morning session higher Thursday, in line with other Asian markets, on a technical rebound from recent losses, with commodities leading the rally on soaring crude oil prices.

Crude oil moved closer to 105 US dollars a barrel in Asian trade Thursday, touching a new record high following an unexpected drop in US stockpiles and OPEC's rejection of calls to increase output.

The composite index ended the morning up 30.57 points or 1.2 percent at 2,670.22, on volume of 1.5 billion shares worth 2.68 trillion rupiah.

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Commodities proving the saving grace for investors

According to bankers in London and New York, fears over rising global inflation, robust fundamentals and the weakness of the dollar are other reasons for the strong interest (in commodities).

Barclays Capital says inflows to both simple exchange-traded products and more complex commodity products are at all time highs.

The bank estimates that investors poured about $3bn into commodities in January, about double the amount for any month during 2007.

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Oil, Gold, Corn Rise to Records, Fueling Rebound in Commodities

Crude oil, gold and corn prices surged to records, leading a rebound in commodities on renewed concern that a slumping dollar and lower borrowing costs will spur inflation and increase demand for raw materials.

The UBS Bloomberg Constant Maturity Commodity Index of 26 futures contracts jumped 41.46, or 2.8 percent, to 1,549.09. The gauge has jumped 21 percent this year, reaching a record 1,573.8381 on Feb. 29.

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Commodities: The Squeeze Gets Tighter

Prices for oil, metals, and grains are surging, putting businesses and consumers in a bind. And there's little chance of relief anytime soon

Investors, worried about the shaky state of the equity, credit, and housing markets—and the steady decline in the U.S. dollar—are seeking safety in hard assets. And that is driving prices of commodities ranging from precious metals to grains through the roof. Speculators may be sporting ear-to-ear grins, but the surge is causing consternation among businesses as they watch prices for key manufacturing inputs reach uncomfortable levels.

The price spikes have occurred across the commodities spectrum, with oil, which hit a record closing high of $104.46 per barrel on Mar. 5, the most visible example.

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Weak $, real int rates helping commodities: Smith Barney

Alan Heap, Chief Commodity Analyst at Smith Barney said that the US is not an important consumer of metals as before but accounts for just 12% of the copper demand. He added that there is a massive inflow of long only funds into the commodity market and that US and European pension funds are moving money into the commodity market. According to Heap, a weak dollar and negative real interest rates are supporting commodities while the global energy crunch is supporting high crude prices. He added that bulk commodities are insulated from the US slowdown.

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Shanghai copper up, LME near peak on fund buying

Shanghai copper jumped 2.4 percent on Thursday after London futures surged to within 1 percent of a record high the previous day, as a weaker dollar sent funds back into commodity indices.

London Metal Exchange copper touched $8,725 a tonne in electronic dealing on Wednesday, just $75 off an all-time high, in a broader commodities rally that also drove oil and gold to record highs.

"The strong iron ore settlement prices, up 65-70 percent, have emboldened some investors into thinking demand from China will remain firm, Burg added.

The May copper contract the most active on the Shanghai Futures Exchange, rose 1,620 yuan to 69,460 yuan a tonne at midday. Spot copper in Shanghai rose 800 yuan to between 68,300 and 68,600 yuan.

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Asian currencies firm; Sing dollar and ringgit at highs

The Singapore dollar and Malaysian ringgit hit their highest in more than a decade on Thursday and other Asian currencies also firmed on heightened expectations of a US rate cut in March after weak US data.

The Philippine peso and Taiwan dollar gained 0.4 percent each after the US dollar weakened to a record low against the euro overnight due to soft private sector employment data from the US and figures indicating the service sector had contracted in February.