NEW YORK (Reuters) --Oil briefly touched $120 a barrel on Thursday, its fourth day of gains, boosted by the threat of damage to U.S. oil installations from Tropical Storm Gustav. The storm is forecast to reach hurricane status as it approaches the Gulf of Mexico, home to a quarter of U.S. crude oil production and 15 percent of its natural gas output. U.S. crude oil for October delivery was up 95 cents at $119.10 a barrel by 9:50 a.m. EDT. It reached an intraday high of $120.50 a barrel. London Brent crude was up $1.01 at $117.23 a barrel. "Gustav...is on track to pose a sizeable threat to both upstream and downstream production capacity," Thomas Stenvoll, energy strategist at UBS, said in a research note. "The impact of Gustav on the downstream sector could be felt more acutely -- at least in the short term -- as there is no U.S. government inventory that can be released." The International Energy Agency has said it is ready to release strategic oil stocks if needed. The agency, adviser on energy issues to 27 industrialized countries, released oil product stocks in 2005 after Hurricane Katrina. Gustav is forecast to hit the U.S. Gulf Coast around Monday and will be the first major hurricane to threaten U.S. energy installations since hurricanes Katrina and Rita in 2005.                                                                        The U.S. dollar pared losses against the euro and yen on Thursday after data showed the U.S. economy expanded at a stronger-than-first-thought 3.3 percent annual rate in the second quarter. The dollar was last trading at 109.46 yen, down 0.1 percent on the day, from 109.25 yen before the release of the data. The euro was at 1.4739 from 1.4765 before the report.

NEW YORK (Reuters) --Asian stocks rose on Monday and the U.S. dollar hit a six-month high against the euro as oil briefly slipped below $115 a barrel and a view gained ground that the currency's long-term decline is nearing an end. Government bond prices also climbed, suggesting the rally in equities thinly covered darker fears that the impact of the U.S. economic slowdown on the rest of the world may have been underestimated. Popular trades such as betting against the dollar and financial sector shares while also speculating on a rise in oil prices were slashed last week. On Friday the euro recorded its largest single-day decline against the dollar in 7-½ years. However, the key remained the direction of oil prices. "The dollar has been strengthening due to a deterioration in economic data outside of the U.S. coupled with low oil prices," said Ashley Davies, currency strategist with UBS in Singapore. "If oil were to start creeping higher again in the absence of clear fundamentals, it would raise the risk of a partial reversal of recent moves," he said in a note. The euro fell to a six-month low at $1.4908 before recovering slightly to around $1.4970 by 0430 GMT. It has plunged around 6 cents in the last week. The dollar eased back 0.3 percent to around 109.90 yen having hit a seven-month high around 110.40 earlier. On a trade-weighted basis, the U.S. dollar on Friday rose to a 2008 high against seven major currencies, according to Federal Reserve data. Oil prices crept above $116 a barrel on worries that fighting between Russia and Georgia would disrupt energy exports from the Caspian region. Oil hit a three-month low of $114.62 a barrel on Friday. After hitting an all-time high of $147.27 a barrel in July front-month U.S. light crude has tumbled 21 percent on fears about slower demand from developed economies fighting against looming recessions. Gross domestic product data due this week for the euro zone and Japan could renew such fears, particularly with both economies expected to contract on a quarterly basis.

 Dollar rises to five week high Vs euro, buoyed by US data

August 11, 2008 10:00 GMT

NEW YORK (Reuters) --The U.S. dollar climbed to five-week peaks against the euro and three-week highs against the British pound on Friday as better-than-expected economic data allayed worries about a much sharper slow down. The yen, on the other hand, gained broadly, benefiting from heightened stress in financial markets on news that General Motors had hefty losses in the second quarter. That dragged U.S. stocks lower and triggered safe-haven bids for Treasuries.  "U.S. dollar sentiment has certainly changed for the better over the last couple of weeks," said Mark Frey, head foreign exchange trader at Custom House, a global payments dealer in Victoria, British Columbia.  "The U.S. economy has gone through some tough phases, but the jobs number was negative, but still better than expected. I think, more importantly, recent consumer confidence numbers and leading indicators, which are more forward-looking, have been more positive," he added. Friday's data showed that U.S. employers eliminated 51,000 jobs in July, lower than market expectations for a payrolls decline of 75,000. A separate report said U.S. factory activity was unchanged in July, compared with the previous month, but above market forecasts.  In late New York trading, the euro was down 0.4 percent at $1.5538 . It dropped to $1.5514 immediately after the U.S. jobs data, its lowest since June 24, according to Reuters data.  The ICE Futures U.S. dollar index rose as high as 73.527 , building on July's gains, which saw it post its biggest monthly gain since January 2007.  The index, which measures the dollar's performance against a basket of six currencies, was last up 0.4 percent at 73.461.Sterling, meanwhile, fell to three-week lows at $1.9729 . It last traded at $1.9732, down half a percent from late on Thursday. Following the latest U.S. data, investors widely expect the Fed's policy-making Federal Open Market Committee (FOMC) to keep its benchmark federal funds rate steady at 2 percent when it meets on Tuesday. The implied chances for rate increases rise steadily from there to 36 percent in September and 66 percent in October, but the first 25 basis-point-hike is not fully priced until the January FOMC meeting.