The US dollar dropped to its lowest level in nearly eight months yesterday, lifting metals prices and commodity sector stocks, and US crude reversed losses to trade above $40 a barrel.
Safe-haven gold hit a three-week high while the yen hit its highest against the dollar in almost a year and a half, pushing Tokyo to warn it could again intervene against its currency’s rally.
On Wall Street, stocks opened higher led by miners and ahead of results from Alcoa, seen as the unofficial start to quarterly reporting season.
Earnings at S&P 500 companies are expected to have fallen 7.7 per cent in the first quarter from a year ago. Excluding the energy sector, reeling from the slide in crude prices since mid 2014, the S&P earnings decline estimate improves to minus 2.6 per cent according to Thomson Reuters I/B/E/S data.
The Dow Jones industrial average rose 83.92 points, or 0.48 per cent, to 17,660.88, the S&P 500 gained 8.26 points, or 0.4 per cent, to 2,055.86 and the Nasdaq Composite added 29.51 points, or 0.61 per cent, to 4,880.20.
Europe’s FTSEuroFirst 300 index of leading shares rose 0.3 per cent, helped by miners and a rally in Italian bank shares. European stocks have fallen for the last four weeks, and another down week would mark their worst run since mid-2013.
MSCI’s gauge of shares across the globe rose 0.4 per cent and Nikkei futures edged up 0.1 per cent.
The greenback’s slide against the yen prompted a warning from Japan’s top government spokesman, chief Cabinet secretary Yoshihide Suga, who said recent currency moves were one-sided and speculative and that the government would take steps as needed.
The greenback was last down around 0.1 per cent against the yen at 107.94 yen from a low of 107.61, the strongest reading for the yen since late October 2014.
The euro gained 0.3 per cent against the greenback at $1.1437, not far from a six-month high touched last week.
The dollar index hit its lowest level since late August.
The weaker dollar helped lift spot gold to its highest point in four weeks. Gold rose to $1,254 an ounce, its highest since March 22. It was last up about 0.7 per cent at $1,249.11.
In bond markets, the benchmark Treasury 10-year note was little changed, down 1/32 in price to yield 1.7254 per cent from 1.722 per cent late on Friday.
Brent crude prices rose to a four-month high as a rally in wider commodities markets encouraged buying ahead of a meeting of oil producers in Doha next Sunday, aimed at freezing current output levels.
Brent crude futures were up 1.8 per cent at $42.70 a barrel, having touched a session high of $43.06, the highest level since December 7. US crude futures rose 1.5 per cent to $40.32 a barrel. Both Brent and US crude rose more than six per cent on Friday.