September 18, 2014 / 5:22 PM / 3 years ago

GLOBAL MARKETS-Dollar hits six-year peak vs yen, stocks rally

* Dollar climbs on diverging outlook for global rates
    * S&P 500, Dow hit fresh intraday record highs
    * Crude oil prices pressured by rising dollar

 (Adds close of European bond, stock markets)
    By Herbert Lash
    NEW YORK, Sept 18 (Reuters) - The dollar hit a more than
six-year peak against the yen  Thursday on data showing U.S.
jobless claims fell more than expected last week, while global
equity markets rallied after the Federal Reserve renewed a
pledge to keep interest rates low.
    Leading British shares rose as investors bet Scotland would
remain in the United Kingdom after Thursday's referendum.
    A Thomson Reuters basket of 12 stocks listed on Britain's
FTSE 350 index, headquartered in Scotland, has slowly
risen over the last two weeks. (
    The dollar index, a gauge of the greenback's value
against six currencies, climbed to its strongest in more than
four years, supported by the Fed's interest rate forecasts that
were higher than those projected in June. 
    But the index and the euro retreated after the British pound
 climbed 0.68 percent higher to $1.6383 versus the dollar
on anticipation Scotland would remain in the UK union. 
    "The dollar will be in a consolidation phase in the short
term after yesterday's sharp gains," said Greg Moore, senior
currency strategist at RBC Capital Markets in Toronto. 
    The dollar rose as high as 108.96, the strongest
since August 2008, and last traded at 108.65, up 0.68 percent.
    The euro rebounded, rising 0.41 percent to $1.2918.
    Wall Street rallied, with both the benchmark S&P 500 and Dow
indexes setting new intraday highs.
    The Dow Jones industrial average rose 90.92 points,
or 0.53 percent, to 17,247.77. The S&P 500 gained 8.15
points, or 0.41 percent, to 2,009.72 and the Nasdaq Composite
 added 27.35 points, or 0.6 percent, to 4,589.54.
    In Europe, the FTSEurofirst 300 index of top
regional shares closed up 0.93 percent to 1,398.03. MSCI's
all-country world index rose 0.28 percent to
    U.S. Treasury debt prices turned down, with investors
driving some shorter-maturity yields to highs not seen since May
2011 after the Fed on Wednesday raised its forecasts for some
interest rates.
    Yields on two-year notes touched a high of 0.597
percent before settling back to 0.5767 percent on a 1/32 price
decline. That level was last seen in May 2011.
    Yields on benchmark 10-year Treasury notes were
up to 2.6198 percent on a price decline of 5/32.
    The number of Americans filing new claims for unemployment
benefits fell more than expected last week, suggesting a sharp
slowdown in job growth last month was probably an anomaly.
    While other U.S. data on Thursday showed some weakness in
home building and factory activity, the underlying trend
remained supportive of solid economic growth. 
    Oil traded lower amid ample supply and concern over
weakening demand growth in major consumer nations, as well as by
the dollar's rise.    
    A stronger dollar makes dollar-priced commodities such as
oil more expensive for buyers using other currencies but tends
to weigh on oil prices.
    Brent was down $1.41 at $97.56 a barrel, while U.S.
crude was down $1.27 at $93.15 a day after dropping on
government data that showed U.S. crude inventories rose 3.7
million barrels last week.  

 (Editing by Dan Grebler and Bernadette Baum)
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