Picture: ISTOCK
Picture: ISTOCK

New York — The dollar hit a three-week high on Wednesday against a basket of major currencies in the wake of an upbeat view of the economy by the US Federal Reserve, while oil prices resumed a recent pullback and gold slumped to a year low.

A gauge of global stock markets hovered at a one-month high while Wall Street traded near a five-month high as investors digested another significant day of corporate earnings.

The dollar index, which measures the greenback against a basket of six currencies, rose 0.18%, to 95.113 after rising as high 95.407. The euro was down 0.13% to $1.1644.

Demand increased after upbeat comments from Federal Reserve chairman Jerome Powell about the US economy in congressional testimony on Tuesday, a message he reiterated on Wednesday before a US House panel.

"Strengthening economic growth and a confident Fed is helping support the dollar," said Alan Gayle, president of Via Nova Investment Management in Virginia. "Higher short-term interest rates make the dollar more attractive relative to other currencies."

On Wall Street, the Dow Jones Industrial Average rose 57.03 points, or 0.23%, to 25,176.92; the S&P 500 gained 2.19 points, or 0.08%, to 2,811.74; and the Nasdaq Composite dropped 5.72 points, or 0.07%, to 7,849.39.

Morgan Stanley shares rose 2.8% after the bank’s better-than-expected profit.

The pan-European FTSEurofirst 300 index rose 0.6% as shares of Swiss drug maker Novartis and Sweden’s Ericsson gained after their reports. MSCI’s gauge of stocks across the globe gained 0.08%, and touched its highest point in a month.

Benchmark US 10-year notes last fell 1/32 in price to yield 2.8637%, from 2.862% late on Tuesday. The US yield curve remained near its flattest in nearly 11 years.

Oil benchmark Brent crude hit a three-month low after government data showed a rise in US crude inventories and oil production, which highlighted increasing global supply and concerns over weak demand. US. crude fell 0.29% to $67.88 a barrel and Brent was last at $71.89, down 0.37%.

Gold, which is regarded as a hedge against inflation, extended its downtrend and sank to its lowest in a year on a buoyant dollar and falling oil prices. "In this environment, where we also see oil prices falling, and so less concern from investors about rising inflation, that’s another negative for the gold price," said Jens Pedersen, senior analyst at Danske Bank in Copenhagen. Spot gold was down 0.1% at $1,226.23 an ounce.

Reuters