Wall Street, dollar up on possible central bank moves
By Michael Connor
NEW YORK (Reuters) - Equities rose worldwide on Tuesday, with Wall Street reversing early losses and the dollar rising 1 percent against the Japanese yen, as diminishing global growth prospects bolstered hopes for central bank stimulus.
Crude oil prices fell nearly 2 percent after the International Monetary Fund cut its 2015 global economic forecast on lower fuel demand and key producer Iran hinted prices could drop to $25 a barrel without support from the Organization of the Petroleum Exporting Countries.
U.S. crude futures CLc1 closed off 85 cents at $47.99 per barrel, keeping the commodity near its lowest level since 2009 after a fall of more than 55 percent since June.
The greenback strengthened on the IMF forecasts, which showed the United States on a faster growth trajectory than most other major economies. The outlook came after China reported its slowest pace of growth in 24 years.
China's economy grew 7.4 percent in 2014, just below the official 7.5 percent target, but above the 7.3 percent projected by analysts.
The dollar rose on Tuesday to a one-week high against the yen, at 118.87 yen JPY=EBS, as the Chinese data stirred speculation among currency traders that Japan's central bankers might ease policy and curb demand for the safe-haven Japanese currency. The dollar was last at 118.77 yen.
The IMF cut its forecast for global growth in 2015 to 3.5 percent from 3.8 percent, and called on governments and central banks to pursue accommodative monetary policies and reforms.
Expectations the European Central Bank would announce plans later this week to inject more stimulus into the euro zone economy helped lift European shares to a seven-year high, and buoyed investor appetite for risk. The pan-European FTSEurofirst 300 .FTEU3 ended 0.9 percent higher. Continued...