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GLOBAL MARKETS-Dollar hits six-year peak vs yen, stocks rally
September 18, 2014 / 7:07 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 on  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, based in Scotland, has slowly risen over
the last two weeks. (link.reuters.com/wej72w)
    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 0.83 percent to $1.6408 versus the dollar on
anticipation Scotland would remain in the UK. The pound last
traded up 0.55 percent at $1.6364. 
    "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 108.75, up 0.35 percent.
    The euro rebounded, rising 0.39 percent to $1.2915.
    Wall Street rallied, with both the benchmark S&P 500 and Dow
indexes setting new intraday highs.
    The Dow Jones industrial average rose 94.86 points,
or 0.55 percent, to 17,251.71. The S&P 500 added 7.68
points, or 0.38 percent, to 2,009.25 and the Nasdaq Composite
 gained 24.63 points, or 0.54 percent, to 4,586.81.
    In Europe, the FTSEurofirst 300 index of top
regional shares closed up 0.93 percent at 1,398.03. MSCI's
all-country world index rose 0.23 percent to
428.48.
    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.
    Yields on benchmark 10-year Treasury notes were
up to 2.6290 percent on a price decline of 8/32.
    The number of Americans filing new claims for unemployment
benefits fell more than expected last week, suggesting a sharp
slowdown in August job growth 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. 
    Crude oil fell, pressured by ample supply, concerns about
demand growth and a stronger dollar.
    A strong dollar makes dollar-priced commodities such as oil
more expensive for buyers using other currencies but tends to
weigh on oil prices.
    Brent settled down $1.27 at $97.70 a barrel, while
U.S. crude fell $1.35 to settle at $93.07 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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