Back to News page

GLOBAL MARKETS-Dollar resumes slide; stocks, oil prices rebound

  • 23 March, 2015

* Wall Street gains as dollar adds to losses; oil rises

* U.S. bond prices up on Greek debt talk worries

* Oil rises as weak dollar offsets Saudi output

(Adds oil settlement prices)

By Herbert Lash

NEW YORK, March 23 (Reuters) - The dollar fell further on Monday, adding to its steepest weekly drop in 3-1/2 years after the Federal Reserve indicated last week that a rate hike is likely to come later rather than sooner, again helping drive up oil prices and U.S. stocks.

U.S. energy shares were among the biggest gainers on Wall Street as crude prices rebounded on the weaker dollar. The euro rose 1 percent and the dollar index, which measures the greenback versus six major currencies, lost almost as much.

Gold rose for a fourth day to a two-week high, while copper prices in London hit their highest since Jan. 9. A weaker dollar boosts the purchasing power of commodity buyers paying with other currencies.

Traders and investors are focused on when the Fed will tighten policy, viewed as most likely in September or October.

The dollar added to its losses against the euro after a Fed statement last week that suggested a less aggressive timetable for hiking interest rates. The dollar suffered its worst week against the single currency since late 2011.

"There's a very large long-dollar position in the market, and what we appear to be facing is an unwind of that position," said Richard Cochinos, head of Americas G10 FX strategy at Citi in New York.

A Fed rate hike is "widely expected" this year, though the path for subsequent policy moves will be on a meeting-by-meeting basis, Fed Vice Chair Stanley Fischer said on Monday. ID:nL2N0WP168

MSCI's all-country world index .MIWD00000PUS , a measure of equity performance in 46 countries, rose 0.48 percent.

The Dow Jones industrial average .DJI rose 58.73 points, or 0.32 percent, to 18,186.38. The S&P 500 .SPX gained 3.7 points, or 0.18 percent, to 2,111.8 and the Nasdaq Composite .IXIC lost 0.31 points, or 0.01 percent, to 5,026.11.

Exxon Mobil Corp XOM.N was the third-biggest contributor to the gain in the S&P 500, which is less than 10 points away from a new record high.

European shares slid from multi-year highs as a new bout of worries concerning Greece's debt negotiations led investors to book profits on the equity market's solid start to 2015.

The pan-European FTSEurofirst 300 .FTEU3 index of top regional shares closed down 0.66 percent at 1,600.24. All major country indexes in Europe fell, with Germany's DAX .GDAXI sliding 1.2 percent. The DAX hit a record high last week and is still up 21 percent so far this year.

U.S. Treasuries prices rose amid Greek-inspired investor anxiety and talks about the terms of a 240-billion-euro bailout for the cash-strapped country.

Benchmark 10-year Treasuries notes US10YT=RR were up 4/32 in price to yield 1.9164 percent.

The euro strengthened against the dollar despite comments by European Central Bank President Mario Draghi on the bank's bond-buying stimulus plan, which tends to weaken the single currency. ID:nL6N0WP304

The euro was last up 1.15 percent against the dollar at $1.0944 EUR= , not far from a nearly two-week high of $1.10625 hit last week. The dollar was last down 0.18 percent against the Japanese yen at 119.81 yen JPY= .

The dollar index .DXY fell 0.90 percent to 97.030.

Oil rose to almost $56 a barrel as a weaker dollar offset concerns over the global oversupply after Saudi Arabia indicated it was pumping near a record high of 10 million barrels per day.

Brent crude oil futures LCOc1 rose 60 cents to settle at $55.92 a barrel. U.S. crude CLc1 settled 88 cents higher at $47.45.



(Reporting by Herb Lash; Editing by Dan Grebler and Christian Plumb) ((herb.lash@thomsonreuters.com; 1-646-223-6019; Reuters Messaging: herb.lash.reuters.com@reuters.net))

((To read Reuters Global Investing Blog click on http://blogs.reuters.com/globalinvesting; for the Macro Scope Blog click on http://blogs.reuters.com/macroscope; for Hedge Fund Blog Hub click on http://blogs.reuters.com/hedgehub) ((For the state of play of Asian stock markets please click on: 0#.INDEXA ))

Keywords: MARKETS GLOBAL/