The US dollar fell sharply yesterday and was on track for its biggest weekly decline against the euro in more than three years, helping to drive a rally in Wall Street stocks and crude oil.

Riskier assets like equities were in general on track for a strong week, largely driven by the Federal Reserve’s policy statement on Wednesday, which struck a more dovish tone than investors had expected. The Fed appeared to argue against an interest rate hike in June.

The dollar index is up more than 20 per cent since mid-2014. The dollar’s strength for some time buoyed US stocks because it served as evidence of a growing economy, but lately there have been concerns of the impact on profits of US multinational companies.

US crude futures were on track for their first weekly advance of the past five, while the S&P 500 was set to snap a three-week losing streak. The euro was on pace for its biggest weekly jump against the dollar in more than three years, while the US dollar index was set for its biggest weekly drop since 2011.

The dollar index, which measures the greenback against a basket of currencies, fell 1.7 per cent, its biggest one-day decline since October 2011. The euro rose 1.87 per cent to $1.0859 on Friday, while the yen rose 0.54 per cent against the dollar.

European equities closed higher. The FTSEurofirst 300 index posted its highest close since mid-2007, finishing up 0.8 per cent at 1,610.93. Greek equities rose 2.9 per cent after Greek Prime Minister Alexis Tsipras assured European Union creditors his coalition would soon present economic reforms to unlock cash to stave off bankruptcy.

MSCI’s all-country world index of equity performance in 46 countries rose 1.54 per cent.

The Dow Jones industrial average rose 226.52 points, or 1.26 per cent, to 18,185.55, the S&P 500 gained 24.13 points, or 1.15 per cent, to 2,113.4, and the Nasdaq Composite added 47.84 points, or 0.96 per cent, to 5,040.22.

Share of Nike Inc, a Dow component, jumped five per cent, to $103.40, a day after the company reported strong quarterly results, though it warned about the impact of the dollar on the current quarter.

Brent crude rose one per cent to $54.99 per barrel while US crude futures for April delivery jumped five per cent to $46.17.

While concerns remain about oversupply, oil was boosted by the dollar’s decline.

Both gold and silver rose for a third straight session, also helped by the dollar’s weakness.

Gold rose 1.2 per cent while silver jumped 4.7 per cent. Copper rose 3.2 per cent.

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