Dollar rises vs euro

* Dollar rises vs euro, basket of currencies, near 2-yr highs

* Emerging markets, economy worries underpin dollar demand

* Yen hits 6-year high vs euro on risk aversion, repatriation

* Nikkei down over 5 percent on earnings worry, yen cross hit

By Chikako Mogi

TOKYO, Oct 24 (Reuters) - The dollar rose against the euro and a basket of currencies on Friday, holding near two-year highs as worries about global economies and emerging markets prompted investors to keep reducing risk assets and repatriate funds.

Emerging market currencies have been hit hard by the global credit crisis in recent weeks, intensifying risk aversion and prompting investors to repatriate their overseas investments.

Deepening financial turmoil has boosted the allure of the dollar, the world's most liquid currency.

The dollar's broad strength has added fuel to sharp falls in other yen crosses as investors unwind high-yielding currencies favoured for carry trades, using the low-yielding yen to buy high-yielding currencies, traders said.

Bloomberg.com: India & Pakistan

Crude oil pared gains on concern a potential OPEC output cut is insufficient to stave off price declines as global economic growth slows and fuel demand falls.

OPEC is expected to slash at least 1 million barrels a day of production when it meets today in Vienna, according to a Bloomberg News survey. Iran's Oil Minister.

Gholamhossein Nozari said yesterday a 2 million barrel-a-day reduction was needed. U.S. fuel demand fell 8.5 percent from a year ago, the Energy Department said Oct. 22.

``Anything less than 2 million barrels and we're headed lower,'' said Mark Waggoner, president of Excel Futures Inc. in Irvine, California, in an interview with Bloomberg Television. ``The markets are going to go down from here to $58.''

Oil for December delivery was at $67.64 a barrel, down 20 cents, on the New York Mercantile Exchange at 12:38 p.m. Singapore time. It earlier rose as much as $1.66, or 2.5 percent, to 69.50 a barrel. Prices are down 22 percent from a year ago and 5.9 percent this week.

Brent crude oil for December settlement was at $65.66 a barrel, down 26 cents, on London's ICE Futures Europe exchange at 12:36 p.m. Singapore time. It earlier rose as much as $1.41, or 2.1 percent, to $67.33 a barrel.

Oil has dropped from the record $147.27 a barrel in New York on July 11 as slowing economic growth curbs demand.

China, the world's fastest-growing energy consumer, said Oct. 20 its economy expanded at 9 percent in the third quarter, the slowest pace in five years. Concern a deepening global slump will damp profits has pushed the MSCI World Index 4 percent lower this week.

OPEC Cuts

Prices dipped during trading yesterday after Saudi Arabian Oil Minister Ali al-Naimi declined to express his support for a possible cut, on his arrival in Vienna. Saudi Arabia and Iran are the Organization of Petroleum Exporting Countries' two biggest producers.

``Who said anything about a cut?'' al-Naimi said. ``Prices will be determined by the market.''

OPEC should cut production by 2 million barrels a day to stem the slump in prices and ``balance'' the market, Iranian Oil Minister Gholamhossein Nozari said earlier.

OPEC leaders are scheduled to meet in Vienna today at 9 a.m. local time.

The last time OPEC lowered quotas was at a December 2006 meeting in Abuja, Nigeria. The 500,000 barrel-a-day cut took effect in February 2007, expanding an earlier reduction agreed to in October. The cuts were reversed later in 2007 as prices rose.

Barack Obama, John McCain spar over tax policy, economy | News for Dallas, Texas | Dallas Morning News | National Politics

As John McCain warned that Barack Obama's tax plans would make a bad economic situation worse, Mr. Obama said that Mr. McCain supported a 'Wall Street first, Main Street last' economic philosophy.

The economy continued to dominate the presidential rivals' stump speeches as they sought to shore up support in battleground states. Mr. McCain campaigned in Florida on Thursday, while Mr. Obama attended a rally in Indianapolis.

Mr. McCain promoted his proposals to cut taxes for individuals and businesses as crucial to rebuilding the economy.

"We shouldn't be taxing our small businesses more, as Senator Obama wants to do. We need to be helping them expand their businesses and create jobs," he told a rally at a lumber yard in Ormond Beach.

Mr. Obama accused his opponent of not making workers his top priority.

Mr. McCain "wants to keep putting corporations ahead of workers," Mr. Obama said. "Who's looking out for steelworkers? Who's fighting for carpenters? Who's fighting for teachers? Who's fighting for Teamsters? That's the president I want to be."

As a counterpoint to Mr. Obama's appeal to working-class voters, Mr. McCain crossed central Florida on Thursday in a "Joe the Plumber" bus tour with stops at a lumber yard, a dentist office, a restaurant and a produce market.

Mr. McCain reminded audiences of Mr. Obama's "spread the wealth" line, saying Mr. Obama's commitment to raising taxes on those making more than $250,000 a year would kill jobs.

"My commitment to small-business owners here is that I will not spread their wealth around," said Mr. McCain following a meeting with local residents at a restaurant in Orlando. "I want them to keep their wealth and create jobs."

Mr. Obama, playing off a comment Mr. McCain made to CNN that he would cut taxes "for every business in America," said his rival "made the peculiar argument that the best way to stop companies from shipping jobs overseas is to give more tax cuts to companies that ship jobs overseas."

Mr. Obama added: "More tax cuts for job outsourcers? That's what Senator McCain proposed as his answer to outsourcing." The McCain campaign called the inference a distortion.

The Obama camp replied in kind, accusing Mr. McCain of twisting many elements of his tax plan, including a proposal regarding a tax credit on mortgage interest.

Mr. Obama also warned that homelessness could spike without quick action to stave off foreclosures – policies he suggested his opponent has resisted.

Mr. McCain on Thursday repeated his call for the Bush administration to purchase troubled mortgages so homeowners could renegotiate them at more favorable terms.

"I can't emphasize how important it is to keep people in their homes, to go out and buy up these bad mortgages and give people a mortgage they can afford," he said.

McCain: Economy faces 'tough sledding' - UPI.com

"WASHINGTON, Sept. 7 (UPI) -- The U.S. economy faces 'very tough sledding,' but the nation's 'best days are ahead of us,' Republican U.S. presidential nominee John McCain said Sunday.

'Americans are hurting in a way that they have not hurt for a long time,' McCain said on the CBS News program 'Face the Nation.'"

FACTBOX-How strike affects Boeing, suppliers, economy - Forbes.com

Sept 7 (Reuters) - Boeing Co's 27,000-strong machinists union is on strike, halting commercial airplane production, after last-ditch talks failed to agree to a new labor contract by a deadline of midnight Seattle time on Saturday.

Boeing (nyse: BA - news - people ) says plants will stay open, with workers in other unions and nonunion employees expected to report, but production lines at its massive facilities in Everett and Renton, Washington, will halt assembly.

If the fourth Boeing strike in 20 years is prolonged, here are some of the financial losses and problems predicted for the company and an increasingly worldwide supply chain. Economists also anticipate a drag on the Seattle-area and U.S. economies.

BOEING

-- Boeing could lose up to $3 billion in revenue per month, half the company's expected monthly total, if deliveries of its commercial planes are halted, based on figures from the first half of the year.

-- It could lose 30 cents to 40 cents from earnings per share for each month of a strike, according to Wall Street analysts. The company is expected to earn $5.85 per share for the year, on average.

AIRLINES

-- Delivery delays would inconvenience major airline customers such as AMR Corp (nyse: AMR - news - people )'s American Airlines, Continental Airlines (nyse: CAL - news - people ) and Southwest Airlines Co (nyse: LUV - news - people ) .

-- Buyers of the new 787 Dreamliner, already angered by production delays, would face an even longer wait. Big customers include Japan's All Nippon Airways, Australia's Qantas Airways, Britain's Virgin Atlantic and Singapore Airlines (other-otc: SGPJF.PK - news - people ).

-- U.S. plane leasing company, International Lease Finance Corp, a unit of insurer American International Group Inc (nyse: AIG - news - people ) , is the biggest 787 customer, with 74 on order.

-- A lengthy work stoppage could be an opportunity for rival Airbus, a unit of EADS, to pick up some plane orders from uncertain airlines.

SUPPLIERS

-- If Boeing's plane production lines stop, suppliers will stop or reschedule deliveries, causing inventory pile-ups and possible layoffs. Boeing's major suppliers include:

-- General Electric (nyse: GE - news - people ) (engines)

GE supplies its own engines for some wide-body models and its CFM International 50-50 joint-venture with France's Safran supplies all the engines on the 737 single-aisle series, Boeing's top-selling model of aircraft.

-- Pratt & Whitney, a unit of United Technologies Corp (nyse: UTX - news - people ) (engines)

-- Rolls-Royce (other-otc: RYCEY.PK - news - people ) (engines)

-- Spirit Aerosystems Holdings (fuselage, wings)

-- Honeywell International (nyse: HON - news - people ) (electronics)

-- Rockwell Collins (nyse: COL - news - people ) (avionics)

-- Goodrich (nyse: GR - news - people ) Corp (wheels, brakes)

-- Alenia Aeronautica, part of Finmeccanica (fuselage on 787)

-- Latecoere (787 passenger doors)

-- Japan's "heavies," which are working on 787 structures:

-- Mitsubishi Heavy Industries (other-otc: MHVYF.PK - news - people )

-- Kawasaki Heavy Industries

-- Fuji Heavy Industries

LOCAL ECONOMY

-- Boeing is the leading private employer in the Puget Sound area around Seattle. There are 13,000 IAM union members at its wide-body plant in Everett, Washington, 5,000 at nearby Renton and more scattered throughout the area.

-- A strike would mean no pay for workers, signaling cutbacks in home and leisure spending and a likely increase in defaults on home loans and credit-card debt.

-- The IAM offers to pay strikers only $150 per week from the third week of a strike. Normal health-care coverage ends after a month.

U.S. ECONOMY

-- Striking workers generally cannot claim unemployment benefits, but others whose jobs are affected because of a strike can, which could increase jobless claims nationwide.

-- Figures for U.S. companies' inventories would rise.

-- If airlines stop making new orders for Boeing's planes, it would drag down closely watched monthly durable goods orders figures.

-- If a strike leads to improved terms, other U.S. workers would be more tempted to take action in upcoming contract talks. (Reporting by Bill Rigby; Editing by Tim Hepher and Maureen Bavdek)

FACTBOX-How strike affects Boeing, suppliers, economy - Forbes.com

Sept 7 (Reuters) - Boeing Co's 27,000-strong machinists union is on strike, halting commercial airplane production, after last-ditch talks failed to agree to a new labor contract by a deadline of midnight Seattle time on Saturday.

Boeing (nyse: BA - news - people ) says plants will stay open, with workers in other unions and nonunion employees expected to report, but production lines at its massive facilities in Everett and Renton, Washington, will halt assembly.

If the fourth Boeing strike in 20 years is prolonged, here are some of the financial losses and problems predicted for the company and an increasingly worldwide supply chain. Economists also anticipate a drag on the Seattle-area and U.S. economies."

AFP: US takeover of Fannie, Freddie will strengthen economy: Bush

"WASHINGTON (AFP) — US President George W. Bush said Sunday that the US government takeover of ailing mortgage giants Fannie Mae and Freddie Mac would strengthen the US economy and help quiet roiling real estate and financial markets.

'Americans should be confident that the actions taken today will strengthen our ability to weather the housing correction, and are critical to returning the economy to stronger sustained growth in the future,' Bush said in a statement, after the US government placed the two financial institutions in a 'conservatorship.'

Bush said a financial system meltdown from the potential failure of Freddie Mac and Fannie Mae posed 'an unacceptable risk' to the US economy.

Treasury Secretary Henry Paulson on Sunday announced the takeover of the two government-chartered, shareholder-owned firms, which underpin trillions of dollars of home loans and a have an enormous global financial footprint."