Dollar retreat gives oil and stocks a boost
NEW YORK: World stocks advanced yesterday and were poised for a modest gain to end the week as a drop in the dollar helped lift sagging oil prices.
The dollar fell against a basket of major currencies as preliminary data on US factory and services activities this month fell short of analyst forecasts, stoking doubts over US economic growth for the rest of the year.
The drop in the greenback helped crude pull away from 10-month lows. On the week, both Brent and WTI crude lost nearly 4%. US crude rose 0.84% to $43.10 a barrel and Brent was at $45.64, up 0.93%.
The climb helped lift energy stocks on Wall Street, with the group up 0.8% as the best performing of the major S&P sectors. The dollar briefly managed to recoup some of its declines after data showed new US single-family home sales rose in May and the median sales price surged to a high. The PHLX housing index advanced 0.7%.
The slide in energy prices in recent weeks worsened the outlook for inflation, creating a problem for the world’s major central banks as they attempt to normalise interest rates after years of ultra-loose policy. – Reuters