Dollar dives despite Bernanke; stocks, oil jump
NEW YORK (Reuters) - The U.S. dollar slid to 15-month lows on Monday, boosting world stocks and commodity prices, even after Federal Reserve Chairman Ben Bernanke said the U.S. central bank was monitoring the value of the greenback "closely."
U.S. crude oil futures jumped more than 3 percent as the weaker dollar prompted investors to buy higher-yielding assets such as commodities and stocks.
The greenback weakened on better-than-expected U.S. retail sales data, which stoked risk appetite, and after Asian and U.S. leaders failed to agree on exchange rates at a summit in Singapore.
The dollar briefly pared its losses after Bernanke said the Fed was closely monitoring its value as part of the bank's commitment to jobs growth and price stability.
But he also repeated that U.S. benchmark interest rates are likely to remain low for "an extended period," leading investors to eventually conclude that Fed monetary policy will remain loose for a long time, further weakening the greenback.
"Until the world sees actual action, the U.S. dollar will remain in secular decline," said Peter Boockvar, equity strategist at Miller Tabak + Co in New York.
"Money will go where it's best treated, and monetary and fiscal policy in the U.S. is not currently treating the U.S. dollar well, relative to other countries," he added.
U.S. stocks jumped to fresh 13-month highs, with the Standard & Poor's 500 .SPX finishing above 1,100 for the first time since October 2008.
The Dow Jones industrial average .DJI ended up 136.49 points, or 1.33 percent, at 10,406.96, while the S&P 500 index gained 15.82 points, or 1.45 percent, to 1,109.30. The Nasdaq Composite Index .IXIC rose 29.97 points, or 1.38 percent, to 2,197.85.
The MSCI all-country world stock index .MIWD00000PUS climbed 1.6 percent, while an emerging market stocks index .MSCIEF rallied 2.1 percent.
The pan-European FTSEurofirst 300 index of top shares .FTEU3 closed up 1.5 percent at 13-month highs, also boosted by commodity-related stocks like miners Rio Tinto Plc (RIO.L) and Xstrata Plc (XTA.L), which gained 5.5 percent and 7.8 percent, respectively.
"The market is up quite strong, with mining and commodity stocks leading the march. The market keeps shrugging off negative figures, and as long as it does so, it is likely to move higher," said Manoj Ladwa, senior trader at ETX Capital in London.
U.S. crude oil futures soared 3.3 percent to $78.90 per barrel, also reflecting improved investor optimism about the U.S. economy following October retail sales data.
In a report reflecting gradual improvement in consumer spending, the U.S. Commerce Department said total retail sales increased a better-than-expected 1.4 percent last month, the largest advance since August.
But the government also revised the September data to a 2.3 percent drop from a previously reported 1.5 percent decline. Continued...
