The US dollar eased yesterday while an index of world stock markets gained and was poised for its best week since early March, as moderate inflation eased worries over a faster pace of US interest rate hikes and boosted risk appetite.
The dollar fell for a third day against a basket of major currencies as traders booked recent gains tied to widening interest rate gaps in favour of the United States and signs of slower growth elsewhere in the world.
Gold was set for its first weekly gain in four weeks after soft US inflation data suggested the Federal Reserve would show caution as it boosts interest rates.
Oil prices slipped but remained near three-and-a-half year highs as the prospect of new US sanctions against Iran tightened the outlook for Middle East supply at a time when global crude production is just keeping pace with rising demand.
US stocks gained as healthcare stocks led a rally ahead of a speech by Donald Trump on drug pricing. They were also propelled by results, with corporate earnings growth for the first quarter estimated at 26 per cent, according to Thomson Reuters Proprietary Research.
The advance was a delayed reaction to exceptionally strong earnings growth and benign inflation, said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management in New York.
The Cboe Volatility Index, a barometer of expected near-term volatility for the S&P 500 that often is referred to as Wall Street’s fear gauge, has fallen to levels seen before the February market correction, he said.
European shares edged higher, with the pan-regional STOXX 600 index of companies in 17 countries, rising 0.11 per cent for a seventh straight week of gains and the largest string of weekly advances since March 2015.
Shares in Daily Mail and General Trust (DMGT) rose 1.3 per cent, having jumped as much as 9.4 per cent, after US private equity firm Silver Lake Management Co agreed to buy ZPG, the owner of British property websites Zoopla and PrimeLocation, for $3 billion.
US plans to reintroduce sanctions against Iran, which pumps about four per cent of the world’s oil, has buoyed crude prices.
US crude fell 37 cents to $70.99 per barrel and Brent was last at $77.30, down 17 cents on the day.