Dollar best-returning asset 1st time since November

The dollar beat stocks, commodities and bonds in its first monthly gain since November, as the euro-region debt crisis deepened and evidence mounted that the global economic recovery is losing momentum. The US Dollar Index, which tracks the greenback versus the currencies of six major trading partners, rose 2.2 per cent in May.

The MSCI World Index of equities fell 2.45 per cent last month, while the Standard & Poor’s GSCI Total Return Index of 24 commodities tumbled 6.89 per cent and bonds of all types returned 1.12 per cent on average through May 30, according to Bank of America Merrill Lynch’s Global Broad Market Index.

Traders fled the euro in favour of the dollar on concern Greece may still default on its debt and as the Federal Reserve prepares to stop printing cash to buy Treasuries in a policy known as quantitative easing. At the same time, economists are cutting their growth forecasts, boosting demand for the relative safety of fixed-income assets while diminishing the attractiveness of stocks and commodities.