|
 U.S. stock futures pointed to a higher open on the Wall Street as
well.
The dollar fell sharply on Wednesday after weak U.S. data and
comments from a Fed policymaker interpreted as signaling further
rate hikes could be delayed.
The U.S. currency fell 0.7 percent against a basket of its peers <.DXY>
on Thursday and was on track for its deepest weekly fall since mid
2009. It hit a 3-1/2 month low against the euro and held close to
its weakest for a week against the Japanese yen <JPY=>.
"The dollar is on its knees," said Richard Benson, head of portfolio
management with currency fund Millennium in London. "Probably we
will now have some stability ahead of U.S. payrolls tomorrow."
Dollar weakness, and unconfirmed talk that oil-producing countries
in and outside the OPEC group may meet soon to discuss output cuts,
helped crude prices add to Wednesday's sharp gains.
Brent, the global benchmark, was up 35 cents at $35.39 a barrel,
having fallen as low as $27.10 in mid-January.
Commodity-related shares pushed higher in Europe. The pan-European
FTSEurofirst 300 index rose 0.6 percent while the STOXX Europe
600 Basic Resources Index gained 4.9 percent and oil and gas index
3.2 percent.
Shares in Anglo American, Glencore, BHP Billiton and BP rose
3.5 to 11 percent.
Britain's miner-heavy FTSE 100 index rose 1.4 percent. On the debit
side, Swiss bank Credit Suisse slid 10 percent after posting its
first full-year loss since 2008.
"Now we see that the U.S. dollar has broken down quite significantly
and based on the cross-asset correlation, that certainly helps
commodity prices and stocks," said Gerhard Schwarz, head of equity
strategy at Baader Bank in Munich.
MSCI's broadest index of Asia-Pacific shares outside Japan
jumped 2.3 percent. Australia's resource-rich index rose 2.2
percent.
Tokyo's Nikkei fell 0.9 percent, pressured by a stronger yen,
which harms exporters, and by weak earnings forecasts from leading
companies.
Chinese shares gained, with the CSI300 index closing 1.2 percent
higher as the weaker dollar eased concerns of a sharp near-term
depreciation in the yuan currency.
Stocks globally have had a rough start to 2016, hurt by tepid U.S.
growth, falling oil prices, and concern the world faces a China-led
slowdown.
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But another potential worry -- that the U.S. Federal Reserve would
keep raising interest rates throughout 2016 -- has receded somewhat.
Fed policymaker William Dudley told Market News International in an
interview published on Wednesday that monetary conditions had
tightened since the Fed raised rates on Dec. 3. and that
rate-setters would have to take this into account.
Investors interpreted this as meaning future rate rises might be
delayed. The federal fund futures market indicates traders no longer
expect a Fed hike this year.
Sterling retreated from a one-month high against the dollar
after the minutes from the Bank of England's latest policy meeting
showed the lone policymaker voting for a rate hike dropped his call.
In its Quarterly Inflation Report released simultaneously, the BoE
cut its economic growth forecasts.
The euro was up 0.6 percent at $1.1170, having firmed by about 2
percent on Wednesday.
LOW-RISK
Stock market strength lessened the appeal of low-risk, low-reward
government debt. Yields on German 10-year Bunds, the euro zone
benchmark for borrowing costs, rose 4 basis points to 0.32 percent.
Ten-year U.S. Treasury yields edged up 2 basis point to 1.90
percent.
"The pressure from oil is easing...and tranquillity is returning to
other markets so we can expect a bit of a step back from bonds, and
yields should trend higher," KBC strategist Piet Lammens said.
The revised U.S. rate outlook lifted gold, which hit a three-month
high at $1,147.40 an ounce.
(Additional reporting by Wayne Cole in Sydney, Patrick Graham and
John Geddie in London; Editing by John Stonestreet and Raissa
Kasolowsky)
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