Dubai Debt Woes Roil Markets

Debt struggles in Dubai, the most populous state of the United Arab Emirates (UAE) and best known for its extravagance, rocked markets around the globe. The dollar and yen jumped on a flight to safety, which sent gold and oil lower. Stock markets in Asia and Europe sold off, while the U.S. stock market, which was closed Thursday, looks set to open down today.

On Wednesday, the Dubai government said it would restructure its corporate flagship, Dubai World, and asked creditors to accept delayed payments. Dubai World is seeking a six-month moratorium on interest payments. During that time, it could negotiate with creditors a restructuring that would pare liabilities, which include $20 billion of loans and bonds coming due in the next 18 months, according to estimates cited in the Wall Street Journal. If the lenders don't agree, Dubai World could default on the notes.

Besides Dubai based banks, a number of international banks have exposure to Dubai World. Those banks include: Royal Bank of Scotland Group PLC (NYSE: RBS), HSBC Holdings PLC (NYSE: HBC), Barclays PLC (NYSE: BCS), Lloyds Banking Group PLC (NYSE: LYG), Standard Chartered PLC and ING Groep NV (NYSE: ING).

The EUR/USD is down 0.73% to $1.4899 after trading at $1.51 on Wednesday.

Spot gold last traded at $1162.10 after closing at $1192.10 on Wednesday.

Related ETFs:

• SPDR Gold Shares (NYSE: GLD)
  
• Market Vectors Gold Miners ETF (NYSE: GDX)
  
• United States Oil Fund LP (NYSE: USO)
  
• PowerShares DB US Dollar Index Bullish (NYSE: UUP)
  
• PowerShares DB US Dollar Index Bearish (NYSE: UDN)
  
• SPDR S&P Emerging Middle East & Africa (NYSE: GAF)

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