Dollar at five-week low boosts commodities; stocks rise
By Saqib Iqbal Ahmed
NEW YORK (Reuters) - The U.S. dollar fell for a fourth straight session on Wednesday on waning expectations of a near-term Federal Reserve interest rate hike, while an index of world equity markets advanced to a six-week high.
Commodities rallied on the weaker dollar, and crude oil futures hit fresh 2016 highs on persistent worries related to supply outages.
The dollar hit a five-week low against a basket of currencies as traders reduced bets of an imminent U.S. rate increase following a weak jobs report and perceived dovish comments from the Federal Reserve Chair Janet Yellen. The dollar index .DXY was last down 0.22 percent to 93.619.
The MSCI world equity index .MIWD00000PUS, which tracks shares in 45 countries, rose for a fifth straight session and was up 0.31 percent. Shares have rallied on buoyant crude oil prices and an upbeat assessment of the economy by Fed Chair Janet Yellen on Monday.
"A positive move develops its own momentum," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
"As we saw with the clearly disappointing jobs report, even some bad news is not enough to shake off the positive feeling that has been driving prices higher," he said.
U.S. stocks rose as declines in the dollar lifted some commodity-related shares and boosted the outlook for multinationals. The S&P 500 .SPX closed less than 1 percent shy of its all-time high of 2134.72 and the Dow Jones industrial average .DJI ended above 18,000 for the first time since April.
"I think the good news for the market is that the sentiment is still far from euphoric. So if you have data just chug along and no major shocks, you could potentially have the market gap higher," said Marc Pouey, U.S. Equity and Quantitative Strategist at Bank of America in New York. Continued...