Downbeat China data puts pressure on Aussie and Europe shares; dollar keeps weighing on gold

On Monday an unexpected fall in Chinese exports put pressure on the Australian dollar, although Asian stocks shrugged off the data, boosted by expectations of fresh economic stimulus from Beijing.

Chinese shares hit seven-year highs today even after data showed exports fell 15 percent in March while imports contracted at their fastest rate since May 2009. Economists had forecast a 12 percent increase in exports.

The Australian dollar dropped nearly 1.5 percent after the data from China, which is the main market for Australia's exports of natural resources.

The Chinese data also wput some pressure on the European shares. The pan-European FTSEurofirst 300 share index, which touched its highest level since 2000 on Friday, edged lower.

In Asia, MSCI's main index of Asia-Pacific shares outside Japan rose 0.5 percent, heading back towards its highest since September, reached last week.

China's CSI300 index closed 1.8 percent higher while the Shanghai Composite rose 2.2 percent.

"We continue to expect more monetary easing for a variety of reasons, and the trade data offers further support for this," Reuters reported referring to Oliver Barron, analyst at China-focused investment bank NSBO who said it in a note to clients.

Tokyo's Nikkei 225 index ended flat in an unstable trade as investors took profit on gains in major stocks such as Toyota Motor Corp after the index hit 20,000 last week.

In the currency market, the euro dipped 0.4 percent at $1.0563, a four-week low. Data on Friday from the Commodity Futures Trading Commission showed speculative investors' short euro positions, or bets the single currency will weaken, were only slightly below the previous week's record high, says Reuters.

The European Central Bank is adding to the weakness of the euro, as it is one month into a 19-month asset-purchase programme.

The ECB programme has also pushed euro zone government bond yields lower, with German 10-year yields hitting a record low of 0.14 percent last week. Germany will sell 10-year bonds later this week.

The dollar index measuring the greenback against a basket of currencies, climbed.

The U.S. currency was up 0.1 percent against the yen at 120.36 yen.

The British currency dropped to a fresh five-year low, under pressure from Friday's weaker-than-expected UK industrial output data and concerns about political uncertainty after next month's British general election.

Crude oil prices rose as traders bet a slowdown in U.S. drilling would contribute to higher prices.

The stronger dollar helped push gold lower for the fourth session in five. It last traded at $1,204.90 an ounce.