NEW YORK (Reuters) - The dollar pared gains after hitting an 8-1/2-month high against major currencies on Monday, while the prospect of further European Central Bank stimulus dragged the euro, and oil futures fell on worries about a growing supply glut.
Global stock markets were mixed, with Wall Street ending the session lower ahead of a crucial payroll report Friday, while European shares finished higher. The three major U.S. indexes ended November higher for a second straight month.
“There’s apprehension on the part of investors to make any big commitments ahead of the data and potential policy moves coming up,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
The jobs report is arguably the most important U.S. economic indicator due out before the Federal Reserve decides on Dec. 16 whether or not to raise interest rates for the first time in nearly a decade. It is widely expected to raise rates.
The Dow Jones industrial average .DJI fell 78.57 points, or 0.44 percent, to 17,719.92, the S&P 500 .SPX lost 9.7 points, or 0.46 percent, to 2,080.41 and the Nasdaq Composite .IXIC dropped 18.86 points, or 0.37 percent, to 5,108.67.
The week is expected to highlight the divergent economic policies in the United States and the euro zone, which may set the tone for markets early next year.
European shares were lifted by the prospect of the ECB unveiling an extension of its bond-buying program at a Thursday meeting. The pan-European FTSEurofirst 300 index .FTEU3 rose 0.4 percent for a 2.3 percent monthly gain.
The dollar index .DXY, which measures the greenback against a basket of major currencies, was up 0.17 percent despite disappointing data on U.S. business sentiment and pending home sales. The index hit its highest point since mid-March and had its biggest monthly rise since January.
The euro EUR= fell 0.25 percent against the dollar to its lowest point since April.
The IMF announced on Monday it had decided to include China’s yuan, or renminbi, in its benchmark currency basket, a move that should bolster the yuan’s political clout and standing as a global currency, analysts said.
The offshore yuan CNH=EBS rose slightly after the news and gained 0.3 percent against the dollar to rise to 6.4245 yuan per dollar.
The MSCI index of world stocks .MIWD00000PUS fell 0.5 percent, and ended November down nearly 1 percent.
Oil gave back gains to end lower after a survey estimated higher OPEC output in November, while a strong dollar weighed on demand for commodities priced in the currency.
U.S. crude CLc1 futures settled down 6 cents, at $41.65. Brent crude LCOc1, the global benchmark fell further to $44.55 after settling down 25 cents, at $44.61 per barrel.
Gold XAU= rose 0.5 percent to $1,064.06 an ounce but was on track for its biggest monthly decline since June 2013.
U.S. Treasuries prices were little changed ahead of a busy calendar of speeches from several Federal Reserve officials and key economic data expected during the week.
Benchmark 10-year Treasuries US10YT=RR rose 3/32 in price to yield 2.214 percent, down from 2.222 on late Friday.
The 30-year bond US30YT=RR was up 13/32 in price to yield 2.980 percent.
Additional reporting by Dion Rabouin and Tariro Mzezewa and Caroline Valetkevitch in New York, Tanya Agrawal in Bengaluru; Editing by Bernadette Baum, Nick Zieminski and David Gregorio