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Global Markets: Dollar eases, stocks climb amid benign U.S. inflation

Reuters  |  NEW YORK 

By Herbert Lash

(Reuters) - The U.S. dollar eased on Friday while an index of world stock markets gained and was poised for its best week since early March, as moderate eased worries over a faster pace of U.S. interest rate hikes and boosted risk appetite.

The dollar fell for a third day against a basket of major currencies as traders booked recent gains tied to widening interest rate gaps in favour of the and signs of slower growth elsewhere in the world.

Gold was set for its first weekly gain in four weeks after soft U.S. data on Thursday suggested the Federal Reserve would show caution as it boosts interest rates.

prices slipped but remained near 3-1/2 year highs as the prospect of new U.S. sanctions against tightened the outlook for supply at a time when global crude production is just keeping pace with rising demand.

U.S. stocks gained as led a rally ahead of a speech by U.S. on drug pricing. They were also propelled by results, with corporate earnings growth for the first quarter estimated at 26 percent, according to Proprietary Research.

The advance was a delayed reaction to exceptionally strong earnings growth and benign inflation, said Leo Grohowski, at in

The Index, a barometer of expected near-term volatility for the that often is referred to as Wall Street's fear gauge, has fallen to levels seen before the February market correction, Grohowski said.

"Not only has the market returned handsomely, but risk has also taken a breather," he said.

MSCI's gauge of stock markets across the globe gained 0.36 percent.

European shares edged higher, with the pan-regional index of companies in 17 countries, rising 0.11 percent for a seventh straight week of gains and the largest string of weekly advances since March 2015.

Shares in and General Trust (DMGT) rose 1.3 percent, having jumped as much as 9.4 percent, after U.S. private equity firm agreed to buy ZPG, the owner of British property websites Zoopla and PrimeLocation, for $3 billion.

On Wall Street, the Dow Jones Industrial Average rose 25.36 points, or 0.1 percent, to 24,764.89. The lost 0.84 points, or 0.03 percent, to 2,722.23 and the dropped 16.44 points, or 0.22 percent, to 7,388.54.

U.S. plans to reintroduce sanctions against Iran, which pumps about 4 percent of the world's oil, has buoyed crude prices.

U.S. crude fell 37 cents to $70.99 per barrel and Brent was last at $77.30, down 17 cents on the day.

The dollar index fell 0.23 percent, with the euro up 0.38 percent to $1.1958. The Japanese yen firmed 0.16 percent versus the greenback at 109.24 per dollar.

Central bankers around the world appear to have become more cautious as concerns over and international trade cloud the global

On Thursday, the of England held rates against recent expectations and New Zealand's Reserve said the official cash rate will remain at 1.75 percent for "some time to come."

This leaves the Fed as the only major central committed to rate hikes, but Thursday's moderate inflation reading cast doubt over the pace of these hikes.

Benchmark 10-year notes rose 1/32 in price to yield 2.9677 percent

(Reporting by Herbert Lash; Editing by Bernadette Baum)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, May 11 2018. 22:43 IST
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