Reuters: US Dollar Report: GLOBAL MARKETS-Stocks rises, dollar off on Bernanke comments

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GLOBAL MARKETS-Stocks rises, dollar off on Bernanke comments Mar 26th 2012, 15:38 Mon Mar 26, 2012 11:38am EDT * Bernanke comments lift stocks, drag on dollar * Gold shoots up 1 percent * German business sentiment rises unexpectedly By Rodrigo Campos NEW YORK, March 26 (Reuters) - Global stocks rose on Monday while the dollar retreated after U.S. Federal Reserve Chairman Ben Bernanke said a continuation of easy monetary policy would be key to cutting U.S. unemployment. Bernanke, speaking to the National Association for Business Economics, said accommodative monetary policy would support demand and, over time, drive down long-term unemployment. His comments underscored views that easy monetary policy would remain in place for some time and also fanned expectations for more quantitative easing. Previous rounds of Fed asset purchases have weakened the dollar and boosted U.S. and global stocks. Also supporting equities, German business sentiment rose unexpectedly for the fifth month in a row in March, signalling that Europe's largest economy is more resilient than others tied to the euro zone debt crisis. "There's optimism that monetary accommodation is alive both here and in Europe, and so long as that is the case markets can continue to have a positive tone," said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management in New York. "With things getting better, but also continued accommodation, that's a very comfortable tone for the market." In late morning trading in New York, the Dow Jones industrial average rose 125.44 points, or 0.96 percent, to 13,206.17. The S&P 500 Index added 13.41 points, or 0.96 percent, to 1,410.52. The Nasdaq Composite gained 34.77 points, or 1.13 percent, to 3,102.69. Global equities as measured by MSCI rose 0.8 percent, the largest jump in the index in two weeks. The pan-European FTSEurofirst 300 index provisionally closed up 0.85 percent to 1,088.63 points. The euro hit its highest level against the greenback in more than three weeks while the U.S. currency slid to a more than three-week low against the Swiss franc. The euro rose as high as $1.3339, its highest level since March 1, according to Reuters data. Against the Swiss franc, the dollar dipped as low as 0.9030, its lowest since March 1. Sentiment toward the euro remained cautious as investors worried about the euro zone's troubled economy. Gold prices rose 1 percent on Bernanke's comments, as the dollar weakened and the Fed chairman's dovish stance reminded investors about the threat of inflation. "I think people have taken that to mean that gold is still going to be in demand," said Simon Weeks, head of precious metals at ScotiaMocatta. The decline in the U.S. currency also boosted prices of crude futures, denominated in dollars. Brent crude futures were up 33 cents to $125.46 a barrel and U.S. crude futures were up 5 cents at $106.92. Link this Share this Digg this Email Reprints

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