Dollar, shares gain on Yellen speech, U.S. GDP
By Herbert Lash
NEW YORK (Reuters) - World equity markets and the dollar advanced on Friday to end a rocky week on an upbeat note after Federal Reserve Chair Janet Yellen said the Fed was on track to raise interest rates this year, and as U.S. economic growth was revised upward again.
Stocks on Wall Street initially jumped following an almost 3-percent surge in Europe, after a report showed the U.S. economy grew more than previously estimated in the second quarter, propelled by consumer spending and construction - the second upward revision in a row.
Gross domestic product grew at a 3.9 percent annual clip, up from a 3.7 percent estimate in August, the Commerce Department said.
Yellen said Thursday that she and other Fed policymakers do not expect recent economic and financial market turmoil to significantly alter the central bank's policy, easing concerns about the world's economic health.
There is much to like about the U.S. economy in the second half of the year, despite "all the global malaise," said Jacob Oubina, senior economist at RBC Capital Markets in New York.
"What the market latched on to with Yellen's speech on Thursday is that she's in the 2015 camp for a rate hike. If the domestic economy holds in there, they are going to hike in December," Oubina said.
The dollar rose 0.23 percent to $1.1203 against the euro and 0.41 percent to 120.55 against the yen. The dollar index rose 0.17 percent.
MSCI's all-country world index pared about half its gains to advance 0.46 percent after Wall Street turned mixed. Earlier in Asia, some markets were in the red after data showed Japan slipping back into deflation. Continued...