GLOBAL MARKETS: Euro shrugs off Irish deal, doubts abound

Doubts over whether a rescue deal for debt-soaked Ireland can plug Europe's debt crisis drove the euro to two-month lows on Monday and trapped Asian stock markets in choppy trade.
Even though European authorities agreed to lend Ireland 85 bln euros on Sunday in the hope it would assure investors that all European nations can repay their debts, the Asian market was cool to the deal.
The euro fell to a two-month low of $1.3183 as investors worried European authorities might not have the means to rescue all fiscally-poor European nations including Portugal and especially Spain, whose economy is much bigger than Ireland's.
"There are still lingering worries about the rest of the countries, including Portugal and Spain," said Lorraine Tan, the director of Asian equity research at Standard & Poor's.
"It does raise risk worries and there are less people willing to take risk at this stage."
The price action in stock and currency markets said as much.
The euro struggled at $1.3224 in mid-day Asian trade, a good way from a high of $1.3345 struck after the Irish aid was announced.
Nervous investors turned instead to the U.S. dollar, considered a safer asset because it is widely traded. The dollar index hit a two-month high of 80.652, and rose against the yen to a two-month peak above 84.18 yen .
The overall cautious tone kept Asian stocks vacillating between modest gains and losses.
By mid-day, the MSCI Asian stock index outside Japan was little changed even though U.S. stock futures were buoyant, with S&P 500 futures up 0.5%.
Japan's Nikkei was the region's best performer with a 0.8 percent rise. But traders noted the market was thin, suggesting buyers were prudent nonetheless, especially with tensions on the Korean peninsula still bubbling.
The reaction in the commodity markets were more mixed.
Oil managed to brush aside the firmer dollar to rise past $84 towards a two-week high as some thought the Irish deal bode well for energy demand.
Copper prices, an essential ingredient for industrial work, were steady while iron ore prices hovered at 6-1/2-month peaks. Iron ore is needed to make steel and is considered a barometer for the state of economic activity.
Gold, on the other hand, which tends to be in demand when investors shy away from risk, was a shade firmer at $1,363.19.