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 Oil prices had already shrugged off the weekend failure of
producers to agree to freeze output at a meeting in Doha, but
Tuesday's gains drove the commodity-linked Australian dollar to a
10-month high against its U.S. counterpart.
Brent crude <LCOc1>, the international benchmark, last traded at
$43.27 per barrel, up nearly 40 cents. Kuwaiti output fell to 1.1
million barrels a day on Sunday from 2.8 million bpd in March due to
the strike, although analysts expect the impact to be brief.
"It is quite amazing how oil prices have recovered from Monday's
lows. That is shoring up risk appetite and pushing up
commodity-linked currencies," said Niels Christensen, FX strategist
at Nordea. "As long as oil remains above $43 a barrel we think
commodity currencies will remain supported."
 Oil's rise from lows around $27 touched in February, along with
signs of an improving U.S. economy and the U.S. Federal Reserve's
cautious approach to raising interest rates, have helped lift stocks
on Wall Street and elsewhere in recent weeks.
The pan-European FTSEurofirst 300 share index <.FTEU3> rose 1.3
percent, led higher by gains in basic resources stocks <.SXPP>, oil
and gas <.SXEP> and travel and leisure <.SXTP>.
The FTSEurofirst is up 14 percent from February lows.
Britain's FTSE 100 <.FTSE> added 0.5 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> was up 1 percent, after touching its highest
intraday levels since November.
Tokyo's Nikkei <.N225> gained 3.7 percent, Australian shares <.AXJO>
hit their highest since early 2016 while New Zealand shares <.NZ50>
hit a new record high.
In China, both the CSI 300 <.CSI300> and the Shanghai Composite
<.SSEC> indexes closed 0.3 percent higher.
Emerging market stocks measured by MSCI <.MSCIEF> rose 0.7 percent
and EM currencies broadly gained. Oil exporter Russia's rouble
<RUB=> gained 1 percent to 65.50 per dollar.
The Australian dollar <AUD=> rose 0.5 percent to $0.7782, having
earlier hit its strongest since June at $0.7803. The Canadian dollar
<CAD=> hit its highest since July.
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The U.S. dollar edged 0.1 percent lower against a basket of
currencies <.DXY>. The euro <EUR=> was up 0.1 percent to $1.1328 but
the safe-haven yen, which last week hit 17-month highs around 107.61
per dollar, fell 0.3 percent to 109.14.
Assurances from Fed Chair Janet Yellen that the central bank would
be cautious in raising rates have held the dollar in check lately.
The Fed meets next week and while no move is expected, investors
will be on the look-out for signs of a hike in June.
European Central Bank policymakers meet on Thursday.
Government bond yields rose with stocks. In the euro zone, Italian
yields rose before a hefty auction and Spanish 10-year yields
<ES10YT=TWEB> rose 3 basis points to 1.53 percent after political
parties' latest failure to form a government since an inconclusive
election in December.
"It looks like the (Italy) announcement came as a surprise ... and
now the market is preparing for that supply," Mizuho strategist
Peter Chatwell said. "We've also got all of these political factors
building up ... and the sentiment is going to be towards spreads
widening from here."
Copper prices <CMCU3>, which have benefited from signs of economic
recovery in China in recent weeks, dipped 0.4 percent to $4,809 a
tonne.
Gold <XAU=> rose as the dollar weakened. It last traded at around
$1,242 an ounce.
(Additional reporting by Lisa Twaronite in Tokyo, Anirban Nag and
John Geddie in London; Editing by Andrew Heavens)
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