Market Report – Dollar Skids on Oil

In today’s market report… Britain’s The Independent newspaper reported that Gulf States are in secret talks with Russia, China, Japan and France… to replace the dollar with a basket of currencies and gold for trading in oil within nine years.

The dollar skidded against the euro after the report. It cited unidentified sources and adds to speculation that central banks, not just in Asia, are looking to diversify away from the greenback.

In Australia, the Aussie dollar soared after the Reserve Bank unexpectedly raised interest rates by a quarter of a percent from a record three percent low, saying the worst danger for the economy had passed.

The Reserve Bank’s decision makes it the first of the Group of 20 central banks to hike as the global financial crisis eases.

It reflects the relative strength of the Australian economy, which boasts a sound banking system and strong demand from China for its commodity exports.

Meanwhile, Rio Tinto’s Alcan Automotive says it will set up a joint parts manufacturing venture in northern China, to try and cash in on a growing market for fuel-efficient vehicles in the Mainland.

And a Japanese newspaper reported that Toyota is considering working with affiliate Fuji Heavy Industries, which makes Subaru.

Toyota said it will develop electric vehicles, slated for a global launch in 2012, sending shares higher.

Mazda also jumped after it said it would raise $1.1 billion in a share sale to invest in hybrid and other technologies in what analysts said was a long overdue bid to close the gap with rivals.

(NTDTV)