ANALYST VIEWPOINT: "We are certainly seeing a pull back from the strong October equity rally, although a weak set of USA data this week could be taken as a positive if it definitively pushes back expectations for a Fed rate hike into 2016", Angus Nicholson of IG said in market commentary. The dollar extended its losses against the yen and euro Monday as weak United States and Chinese data fuelled concerns about the global economy, and bolstered the case against a December rate rise. Asian shares hit their lowest level in nearly three weeks after two surveys showed Chinese factory activity slowing. Japan's Nikkei 225 fell 2.1 percent to 18,687.87 and Hong Kong's Hang Seng dropped 0.8 percent to 22,460.43. The dollar index was down 0.2 percent at 96.75. Seoul closed up 0.28 percent despite a stronger won and a drop in South Korean exports. Asian stocks capped their best month in more than six years on Friday, gaining 8.6 percent in October following a five-month declining streak. The dollar lost 0.2 percent to 120.435 yen as the fall in Tokyo shares cooled risk appetite and favoured the safe-haven Japanese currency. Draghi said after the ECB's last policy meeting that the central bank could introduce new stimulus measures as soon as December and was considering cutting its deposit rate. In an interview with the Italian newspaper Illinois Sole 24 Ore published on Saturday, he said it was an open question whether further stimulus was needed. The yuan maintained its advance Monday, trading at 6.3277 a dollar offshore after surging at least 0.6 percent on Thursday and Friday. The Caixin China manufacturing purchasing managers' index, a private gauge of China's manufacturing activity which shows private enterprises over and above the official reading, rose to 48.3 in October, marking the eighth-straight month of contraction and up from 47.2 in September. Stocks fell in Europe and Asia on Monday after further evidence of economic slowdown in China, but modest growth in German factory activity slightly brightened the mood. Data released on Friday by the Commodity Futures Trading Commission showed the value of the dollar's net long position jumped to $21.6 billion in the week ended October 27, from $13.32 billion the week before. Policy makers in Asia's largest economy cut rates a week ago for the sixth time in a year, with economic growth falling last quarter to below the government's 2015 target. Chevron Corp. said its cutting about 10 percent of its workforce and scaling back its production target amid the pullback in oil over the past year. "US economic data bear significance for the December (Federal open market committee) decision and could drive higher forex and rate volatility in the coming weeks", Barclays strategists wrote. The euro rose to $1.1031 from $1.1009.
