Reply #5: RPT-GLOBAL MARKETS-US dollar jumps on oil slide, political risk

[Dr.Phool]

By Kevin Plumberg

HONG KONG, Sept 2 (Reuters) - The U.S. dollar hit a 7-month high against the euro on Tuesday, boosted by a slide in oil prices to below $109 after a storm threat weakened and rife political and economic uncertainty in Thailand and South Korea.

Asian stocks fell to a 2-year low, led by sharp losses in Japanese stocks, where confusion reigned about the country's leadership. European stocks opened weaker.

Deteriorating economic growth prospects and public unrest in parts of Asia continued to take a toll on the region's political establishment. Japan's unpopular prime minister resigned late on Monday and a state of emergency was declared in Bangkok, which weighed on the baht currency.

The South Korean won dropped to a 4-year low against the dollar, even though the government warned it had the ability to stem the currency weakness, with investors concerned about a flight of capital from Asia's fourth-largest economy. Equity markets fell to an 18-month low amid talk of a looming crisis. Continued...

http://www.reuters.com/article/marketsNews/idINSP14000020080902?rpc=44