Credit Suisse Turns Bearish on U.S. Dollar Amid Fears of Monetary Policy Impotence

Credit Suisse has turned bearish on the U.S. dollar versus the other two G3 currencies for the first time since the greenback's scintillating rally began in the middle of 2014.

The bank's currency team, led by Global Head of FX Strategy Shahab Jalinoos, sees EURUSD rising to 1.17 and USDJPY falling to 110 over the next three months.

Concerns about monetary policy impotence—that central bankers will be unable to successfully reflate their economies—are becoming embedded in currency valuations, according to the analysts.

There's "a growing fear that monetary policy is now 'pushing on a string,' at least from an FX perspective," they wrote. "EUR and JPY are materially stronger now than levels before ECB chief Draghi hinted at more easing and the BoJ introduction of negative rates in January."

Options traders doubt that the Bank of Japan in particular will be able to keep the yen on its back foot going forward—a development that would bode ill for its attempts to win a decades-long battle against deflation.

"Risk reversal skews are now generally bid for JPY again in the same manner as they were prior to the start of QQE in 2012–the risk of large JPY sell-offs linked to BoJ policy is gradually being priced out," wrote Jalinoos & Co.

Meanwhile, in part due to fears that monetary stimulus from the ECB and BoJ will fail to bear fruit, investors are skeptical of the Fed's ability to continue decoupling policy from that of other major central banks.

Global Stock Market News

The Bank of Japan's recent shift to negative rates has fuelled concerns that ever-more exotic monetary policy is rapidly reaching the point of diminishing returns.

Yet murmurings about the risk of recession in the United Sates has also led investors to wager the Federal Reserve will have to slow, or suspend altogether, plans to normalise rates.

Futures markets have priced out any chance of a hike in March and imply a funds rate of just 0.43 percent by December <0#FF:>. The current effective funds rate is 0.38 percent.

That has pulled down 10-year Treasury yields to their lowest since early 2015 at 1.69 percent US10YT=RR and undermined bullish bets on the U.S. dollar.

It touched a six-week trough on the Swiss franc CHF=, while the euro edged up to $1.1217 EUR=. Against a basket of currencies, the dollar eased 0.1 percent to 96.485 .DXY.

The dollar dived as far as to 114.205 yen JPY=, having been above 121 just a week ago, while the euro fell as much as one percent to 128.31 yen EURJPY=.

The yield on Japan's benchmark 10-year government bond JP10YTN=JBTC turned negative for the first time as the Nikkei stock index tumbled.

The 10-year JGB yield touched minus 0.010 percent. It was the first time a G7 nation's 10-year government bond yield has turned negative, although yields on German bunds have come relatively close.

With more and more sovereign bonds paying negative rates, the relative cost of holding gold has seemed less and less of a burden. The metal XAU= reached its strongest since June at $1,200.60 an ounce, and last traded at $1,193.60.

Oil prices bounced slightly after three sessions of losses. Brent futures LCOc1 added 11 cents to $32.99 a barrel, while U.S. crude CLc1 rose 34 cents at $30.03.

Global Stocks Gain as Commodities Advance After Dollar's Tumble

Stocks gained around the world as a selloff in the dollar underpinned a resurgence in crude oil.
A gauge of European shares rose for the first time this week, led by mining and energy companies. 

Gains were tempered by a plunge in Credit Suisse Group AG shares after the company swung to a quarterly loss. U.S. index futures advanced. The euro extended its 1.7 percent surge on Wednesday, when the dollar tumbled against a basket of currencies. South Korea’s won rallied the most in three months. U.S. oilextended gains above $32 a barrel after jumping 8 percent in the previous session.

The outlook for China has been gloomy for years now. I don’t really think that there’s too much negative sentiment that could be piled on to this market. Investors should start buying slowly.”

The dollar’s retreat was sparked by data showing the U.S. services sector grew at the slowest pace in nearly two years, underscoring the vulnerability of the American economy to unsteadiness abroad.

The report tipped the fixed-income market’s balance closer toward zero rate hikes by the Federal Reserve this year, amid prospects central banks from Asia to Europe will act to quell the turmoil that’s roiled markets in 2016.

The greenback’s drop helped boost the price of crude oil, along with speculation OPEC and other oil producing nations have agreed to an emergency meeting on market volatility.

China set a range for its economic growth target for the first time in 20 years, saying late Wednesday that the economy would likely expand 6.5 percent to 7 percent this year, slower than last year’s goal of about 7 percent.

Gyrations in Chinese equity and currency markets unsettled global trading at the start of the year, with regulators’ response to the volatility fueling anxiety over their ability to manage the slowing economy.

Global Stock Market News

D.R. Horton (DHI.N) shares fell 4.7 percent to $26.40 as the No. 1 U.S. homebuilder reported lower-than-expected revenue as its home sales fell in all regions but the Southeast.

Tyco International (TYC.N) jumped 11.6 percent to $34.15 after Johnson Controls (JCI.N) said it would merge with the Ireland-based fire protection and security systems maker. Johnson Controls dropped 3.9 percent to $34.21.

Shares of Dynegy (DYN.N) and NRG Energy (NRG.N) slumped 11.5 percent and 9.6 percent, respectively, after the U.S. Supreme Court upheld a major Obama administration electricity markets regulation.

Caterpillar (CAT.N) dropped 5 percent to $57.91 after Goldman Sachs cut its rating on the stock to "sell".

Twitter (TWTR.N) fell 4.6 percent to $17.02 after Chief Executive Jack Dorsey said four senior executives would leave the social media company.

About 7.9 billion shares changed hands on U.S. exchanges, slightly below the 8.1 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Declining issues outnumbered advancing ones on the NYSE by 2,642 to 466, for a 5.67-to-1 ratio on the downside; on the Nasdaq, 2,132 issues fell and 716 advanced for a 2.98-to-1 ratio favoring decliners.

The S&P 500 posted 3 new 52-week highs and 22 new lows; the Nasdaq recorded 12 new highs and 103 new lows.

Stock futures sink as oil rout shows no signs of abating

U.S. stock index futures fell sharply on Wednesday, tracking global markets, as crude oil prices tumbled to new lows and fears of slowing global growth continued to gnaw at investors.

* U.S. crude wallowed at its lowest since 2003 and Brent crude fell to near 12-year lows. The IEA, the world's energy watchdog, warned the market could "drown in oversupply."

* European stocks slid to their lowest since October 2014 and were set for biggest fall of the year so far, while Japan's Nikkei slid into bear market territory.

* The U.S. market has been roiled this year due to slumping oil prices and weak economic data out of China, the world's second-largest economy and a key market for major U.S. companies.

* The S&P 500 has fallen 8 percent so far this year, wiping off more than $1.4 trillion, while global markets have lost $4.2 trillion, according to Thomson Reuters data.

* Still, the S&P currently trades at 14.9 times forward earnings, slightly higher than its 10-year median of 14.7, according to Thomson Reuters StarMine.

* Concerns regarding the state of the global economy has taken some attention away from fourth-quarter U.S. corporate earnings, which is expected to fall 4.4 percent.

* Shares of IBM were down 4.6 percent at $122.25 premarket after the tech major forecast weak earnings.

* Apple and Microsoft were also down about 2 percent.

* Netflix was up 3.8 percent at $112 after its subscriber base grew more-than-expected.

* Data due on Wednesday includes core Consumer Price Index, which excludes food and energy. The index likely gained 0.2 percent in December, unchanged from November. The data is expected at 8:30 a.m. ET (13:30 GMT).

Global Stock Market News

The S&P 500 gained 1.7 percent, led by a 4.5 percent rise in the energy sector.

The U.S. market was also helped by comments from St. Louis Federal Reserve President James Bullard that the continued rout in global oil markets has caused a "worrisome" drop in U.S. inflation expectations that may make further rate hikes hard to justify.

U.S. retail sales data due later on Friday will be on investors' radar as they try to gauge the likelihood of the Fed raising rates in March.

In the currency market, the yen advanced after earlier losses on a resumption of demand for the safe haven currency.

The dollar slipped 0.1 percent to 117.89 yen, after earlier rebounding from a 4 1/2-month low of 116.70 yen hit on Monday.The euro advanced 0.1 percent, fetching $1.0879.

The European Central Bank said it saw scope for further cuts in its deposit rate in minutes of its December meeting, but many ECB policymakers appeared sceptical about the need for further action in the near term.

Commodity-linked currencies retreated after their earlier gains, with the Australian dollar slipping 0.4 percent to $0.6957, compared with Thursday's four-month low of $0.6910.

Saudi Arabian shares, one of the worst performing market along with China so far this year, hit five-year lows on Thursday.

Low oil prices not only hurt many oil-producing countries but also prompt their sovereign wealth funds to sell assets to finance budget gaps, putting pressure on many assets.

Currency Markets News

In currency markets, the safe-haven yen found itself temporarily out of favour as the dollar moved up to 118.30 yen from an early 117.61.

The Australian dollar, often used as a liquid proxy for the yuan, rallied over half a U.S. cent at $0.7026, while the euro slipped to $1.0827 from $1.0860.

The dollar rose 0.2 percent against a basket of currencies to 99.156, approaching resistance around the 100 barrier.

Likewise, low-risk sovereign bonds had to surrender a little of their recent gains and yields on 10-year debt nudged up 4 basis points 2.138 percent.

The hint of firmer demand from China provided a reprieve for commodity prices, which have been under the hammer for months.

U.S. crude edged up 40 cents to $30.84 a barrel, a day after breaching the $30 barrier for the first time in 12 years.

Benchmark Brent was quoted 26 cents higher at $31.12 a barrel. U.S. crude had fallen 17 percent in just seven sessions, a gift to consumers across the globe but also a strong force for disinflation.

World stocks drop but Europe shrugs off oil slide, China money market surge

World stocks fell for the fifth straight day on Tuesday, anchored near their lowest level in over two years with investors rattled by the slump in oil prices and a surge in offshore Chinese yuan deposit rates.

European stocks, however, recovered from early weakness thanks to a rally in the retail sector. British companies in particular posted strong seasonal updates, lifting the FTSEuroFirst 300 .FTEU3 up from a three-month low.

Earlier, the People's Bank of China forced up overnight deposit rates in Hong Kong to 66.8 percent to ease the heavy downward pressure on the yuan, analysts said, an indication of the drastic measures required to cool Chinese market volatility.

As oil slid closer to falling below $30 a barrel for the first time in 12 years, deflation-wary investors in Asia shunned equities and pushed the value of the safe-haven Japanese yen.

At 0900 GMT (4 a.m. ET) the FTSEuroFirst 300 was up 0.6 percent at 1,342 points, only its second rise this year. Britain's FTSE 100 .FTSE was up 0.5 percent up, Germany's DAX .GDAXI was up 1.1 percent and France's CAC 40 .FCHI rose 0.8 percent.

Shares in Morrison's (MRW.L) surged 12 percent, Debenhams (DEB.L) climbed 15 percent, and Tesco (TSCO.L) rose 5 percent.

Japan's Nikkei closed 2.7 lower at its lowest level in almost a year .N225, while U.S. futures pointed to a fall of around 0.3 percent at the open on Wall Street ESc1.

Global Stock Market News

Both the Dow .DJI and the S&P 500 .SPX had their worst five-day starts in history last week, and the corporate news flow is unlikely to get any cheerier with the coming results season expected to be a tough one.

 

S&P 500 earnings are forecast to have dropped 4.2 percent in the fourth quarter, a second straight quarterly decline led by the hard-hit energy and materials sectors.

The pain in stocks and worries over China even outweighed the positive impact of December's upbeat U.S. payrolls report and burnished the appeal of higher-rated government bonds.

Yields on 3-, 7-, and 10-year U.S. Treasuries all had their biggest weekly declines since early October last year, while five-year yields dropped by the most since Sept. 2013.

The gains continued on Monday with U.S. 10-year Treasury futures TYc1 up 3 ticks, while Fed fund futures <0#FF:> were pricing in a slightly shallower upward path for rates.

In currency markets, the main early news was the yen which is often favored in times of stress as Japan remains the world's largest creditor nation.

The dollar initially fell half a yen to a near five-five month low of 116.70 yen JPY=, before steadying around 117.22.

Dealers said Japanese investors seemed to be bailing out of long positions in the South African rand by selling rand for dollars and then those dollars for yen.

That saw the dollar surge as much as 10.3 percent at one stage to 17.9950 rand ZAR=D3, before tracking back to 16.6780. That was still up from 16.3150 late on Friday.

The euro started firmer but soon softened to $1.0917 EUR= while the dollar index was all but flat at 98.476 .DXY.

Global Stock Market News

Wall Street also had a gloomy session, with the S&P 500 .SPX losing 2.4 percent on Thursday, with 40 percent of the stocks in the benchmark trading 20 percent or more off of their highs, the definition of a bear market.

That was despite a drop in layoffs and the number of Americans filing for jobless benefits, pointing to a strong December employment report on Friday.

After the U.S. market close, two Apple suppliers added to growing worries about slowing shipments of iPhone 6S and 6S Plus by cutting their revenue estimates for the third quarter.
The Chinese moves offered a leg up to oil futures, with both Brent crude and U.S. oil rallying more than 2 percent.

Brent LCOc1 gained 2.2 percent to $34.49 after touching $32.16 on Thursday, the lowest since April 2004. The gains narrowed losses for the week to 7.5 percent.

West Texas Crude CLC1 advanced 2.1 percent to $33.98, on track for a weekly loss of 8.3 percent.
The shaky risk appetite seen this week sent investors flocking to low-risk assets such as bonds, gold and traditional safe-haven currencies, although that demand eased slightly on Friday.

The 10-year U.S. Treasuries' yield fell to a 2 1/2-month low of 2.119 percent US10YT=RR on Thursday and last stood at 2.1720 percent.

Gold eased back to $1,103.45 after earlier rising to $1,112 XAU=, the highest since Nov. 4. That brought gains for this year to 4 percent.

The yen pulled back from Thursday's 4 1/2-month high of 117.33 yen JPY=, last trading at 118.35 yen. The euro slipped 0.5 percent to $1.0880 EUR=.

The Australian dollar, often used as a liquid proxy for China trade, strengthened to $0.7055 after falling to a three-month low of $0.6981 AUD=D4 on Thursday. It's down 3.1 percent this year

Global Stock Market News

The yuan's weakness, the cooling economy and renewed stock market volatility have put China and its policymaking decisions clearly at the forefront of global risks at the start of 2016, along with the pace of expected U.S. interest rate rises and weak commodity prices.

Shanghai shares .SSEC were last up 0.7 percent after a report that China may extend a ban on share sales by listed companies' major shareholders until new rules are promulgated.

Shen Weizheng, fund manager at Shanghai-based Ivy Capital, said extending share sale restrictions would prolong market bearishness.

The dollar touched a near three-month low of 118.35 yen JPY= and the euro slid to a nine-month trough of 127.465 yen EURJPY=. The 10-year U.S. Treasury yield US10YT=RR fell by about three basis points to 2.22 percent.

The euro steadied at $1.0744 EUR= as the dollar dipped against the yen, after it hit a one-month trough of $1.0711 overnight.

In commodities, crude oil prices struggled near 11-year lows and added to the risk-off mood, with the market more worried about the stronger dollar and swelling U.S. inventories rather than growing tensions between Saudi Arabia and Iran.

Brent crude LCOc1 inched up 0.2 percent to $36.49 a barrel, still in reach of the 11-year trough of $35.98 hit late last month.

Global Stock Market News - The Dollar Held Steady

Surveys of manufacturers across the globe out on Monday had found activity anemic at best, with China and the United states both surprising on the downside. 

That was one reason both the S&P 500 .SPX and the Nasdaq .IXIC suffered their worst starts to a year since 2001. [.N]

"Global growth and geopolitical stability remain the main sources of concern."

A South Korean finance ministry official on Tuesday said the government will take action to stabilize markets if needed.

Sweden on Monday gave its central bank chief formal powers to act immediately to weaken the crown and help push up inflation, a radical step among developed world institutions.

The European Central Bank was under pressure to do yet more after German inflation proved surprisingly weak in December, pushing down bond yields and slugging the euro.

The common currency held steady around $1.0831 EUR= on Tuesday, having touched a one-month low around $1.0780. Against ,

The dollar held steady, at 98.831 against a basket of currencies .DXY and at 119.41 against the yen JPY=.

Oil prices edged up on Tuesday as investors pondered the long run implications of the rift between Saudi Arabia and Iran.

Brent LCOc1 was quoted 0.3 percent firmer at $37.32 a barrel, while U.S. crude added 0.4 percent to $37.90.

Global ETF industry grabs record cash in 2015: BlackRock

Investors poured $347 billion into exchange-traded funds globally during 2015, fund-manager BlackRock Inc (BLK.N) said on Sunday, setting a new record for the industry.

A woman walks next to a BlackRock sign pictured in the Manhattan borough of New York, October 11, 2015.

BlackRock said its own haul of $130 billion in new money also set a record in global flows for its iShares ETF business, surpassing the previous annual record set in 2014, when investors added $103 billion in new money to the funds.

ETFs, generally a basket of stocks, bonds or other assets, grew at a record rate despite markets struggling in 2015 to deliver the broad gains they have posted since rebounding from the financial crisis in 2009. Global ETF assets now total about $3 trillion.

In the United States, inflows of $228 billion last year were not enough to top the record $246 billion brought in during 2014, according to the BlackRock data.

A third-party data provider, ETFGI LLP, said its estimates for the year also showed a similar increase in new assets for global ETFs over 2014 and a decrease in U.S. flows.

The largest U.S. ETF, SPDR S&P 500 ETF (SPY.P), delivered 1.34 percent in total returns in 2015. The iShares Core U.S. Aggregate Bond ETF (AGG.P) , the largest U.S. bond ETF, eked out 0.48 percent, according to Morningstar Inc (MORN.O).

Investors looked to ETFs tracking stocks in places like Europe and Japan, hoping shares of companies there would be boosted by stimulus from central bankers.

Global Stocks Market News

The dollar index .DXY, which tracks the currency against a basket of six others, was flat at 98.344.

Traders were looking to U.S. data, including revised third-quarter GDP and housing price indicators, later in the session but with many markets closed later this week, activity was expected to be thin.

U.S. and most European markets will close on Friday for Christmas, while in Japan, markets will be closed on Wednesday for the emperor's birthday.

Euro zone bond yields DE10YT=TWEB were steady as the European Central Bank put a temporary halt to its asset purchases programme over the Christmas break.

The pause in the 1.5 trillion euro scheme until Jan. 4 removes a pillar of support for markets at a time when inconclusive Spanish elections have created some price ructions.

Spot gold XAU= was little changed at $1,079.20 an ounce after rising 2.5 percent in the past two sessions.

Global stocks rise but oil

Stocks rose in Europe and Asia on Tuesday, though volatile oil prices kept investors cautious before a widely anticipated increase in U.S. interest rates later in the week.

Oil prices resumed their fall and the euro rose against the dollar. Concerns in the high-risk U.S. corporate debt market about the potential impact of a rate hike weighed on low-rated euro zone government bonds.

European shares opened higher after hitting 2-1/2-month lows on Monday when oil prices fell to their weakest since 2008. The pan-European FTSEurofirst 300 index .FTEU3 rose 1.2 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up about 0.1 percent. Japan's Nikkei stock index .N225 ended down 1.7 percent at a 7-1/2-week low and Chinese stocks .SSEC .CSI300 lost 0.3-0.5 percent.

On Monday, U.S. stocks ended higher as oil pulled off its lows. However, Brent crude LCOc1 dropped 25 cents a barrel to $37.67 on Tuesday after falling the previous day to as low as $36.33, its weakest since December 2008. A fall below $36.20 would take it back to levels last seen in mid-2004.

The first U.S. rate rise since 2006 is largely priced in, with the Fed expected to increase its targeted rate range to 0.25-0.5 percent from the current zero to 0.25 percent.

The dollar index .DXY, which measures the U.S. currency against a basket of its peers, fell 0.2 percent. The euro EUR= rose 0.4 percent to $1.1031 while the yen JPY= gained 0.2 percent to 120.83 per dollar.

Global Market News

The Chinese yuan headed in the opposite direction with the central bank setting the midpoint at a more than four-year low for a second day, a sign that Beijing is quietly permitting the currency to depreciate after it was included in the IMF's reserve basket.

The People's Bank of China set the midpoint rate CNY=SAEC at 6.4236 per dollar prior to market open, 0.1 percent weaker than the previous fix of 6.4140. 

The spot marketCNY=CFXS opened at 6.4300 per dollar, its weakest since Aug. 12, and was changing hands at 6.4385, compared with the previous close of 6.4280.

The dollar fetched 121.63 yen JPY= after tumbling overnight to a 1-month low of 121.07 yen as the Japanese currency attracted safe haven bids amid the ongoing rout in commodities.

With the greenback on the back foot against the euro and yen, the dollar index .DXY hovered near a 1-month low of 97.223 struck overnight.

The U.S. currency was hurt as Treasury yields fell on a flight to safety to government debt, prompted by falling oil prices and a decline on Wall Street.

The S&P 500 .SPX tracked weaker commodities and lost 0.8 percent on Wednesday, while the Dow .DJI lost 0.4 percent and the Nasdaq .IXIC shed 1.5 percent.

Global Stock Market News

On the currencies front, action around the China trade data was brief with the Australian dollar settling to new intraday lows, at $0.7224 AUD=D4 and receding further from a 3-1/2 month high of $0.7386 touched on Friday.

The euro was on the back foot as the short-covering rally following last week's less-than-aggressive stimulus from European Central Bank ran its course.

The common currency stood at $1.08560 EUR=, having slipped from its one-month high of $1.0981 set on Thursday. The yen was little changed so far at 123.11 per dollar JPY=.

The offshore Chinese yuan CNH=D4 traded at a three-month low of 6.4930 per dollar despite another lower-than-expected fixing by China's central bank.

Long-dated U.S. Treasury debt prices held firm after rallying on Monday as the drop in oil prices pointed to benign inflation, potentially tempering the Fed's policy tightening path after the expected lift-off on Dec. 16.

The 10-year U.S. debt yield fell to 2.216 percent US10YT=RR, off one-month high of 2.358 percent touched on Friday following strong U.S. employment data.

Global Stock Market News

European markets look set for a rosier open, with financial spreadbetters expecting Britain's FTSE 100 .FTSE and France's CAC 40 .FCHI to start the day up 0.4 percent and Germany's DAX .GDAXI to climb 0.3 percent on the open.

Wall Street had offered no direction as the Dow .DJI ended Tuesday with a slight gain of 0.16 percent. The S&P 500 .SPX added 0.15 percent and the Nasdaq .IXIC eased 0.24 percent.

Weighing on the Nasdaq, Apple shares (AAPL.O) fell 3 percent after Credit Suisse said the iPhone maker had lowered component orders by as much as 10 percent.

In currency markets, the euro struggled as political uncertainty in Portugal provided an excuse to sell in a market already bracing for further monetary policy easing from the European Central Bank.

The common currency last stood at $1.0759 EUR=, having hit a six-month trough of $1.0673 on Tuesday.

The dollar index .DXY eased back form a seven-month peak to slip 0.4 percent to 98.883. The dollar ran into a little profit-taking against the yen, nudging it down 0.3 percent to 122.86 JPY=, from an early 123.15.

Benchmark 10-year Treasury yields US10YT=RR dipped a couple of basis points to 2.32 percent, but remain hostage to the chance of a Fed rate hike next month. Indeed, concerns are growing that another strong payrolls report could lead to rates rising at a faster pace than was currently priced in.

Oil prices resumed their decline on news U.S. crude stocks jumped last week. U.S. crude CLc1 lost 46 cents to $43.75 a barrel, while Brent LCOc1 shed 22 cents to $47.22.

Global Stock Market News

On Thursday, U.S. interest rates futures implied traders saw a 58 percent probability of a rate increase in December, according to CME Group's FedWatch program, while U.S. two-year Treasury yields US2YT=RR hit their highest levels in 4-1/2 years.

Economists expect the report to show that U.S. employers added 180,000 jobs in October, more than September's increase of 142,000 jobs.

New U.S. applications for jobless benefits last week recorded their biggest increase in eight months, but remained above the threshold associated with a healthy labour market.

Fed Chair Janet Yellen and New York Fed President William Dudley said this week that the U.S. was ready for higher interest rates if upcoming economic data justified them.

Higher yields and rising expectations of a December rate hike lifted the dollar index .DXY, which last stood at 98.003, a touch lower than a three-month peak of 98.135 scaled overnight.

The dollar held steady at 121.84 yen JPY= after touching a 2 1/2-month high of 122.01 on Thursday, while the euro was also little changed at $1.0880 EUR= after dropping to a nadir of $1.0834, its lowest level in more than three months.

The stronger dollar added further pressure to crude oil futures, which were already dragged down by oversupply concerns.

U.S. crude edged up about 0.6 percent to $45.49 a barrel, after falling over 2 percent in the previous session. It was still on track to lose 2.4 percent for the week.

Other commodities also struggled, with London copper CMCU3 sliding to its lowest level in a month overnight. While it recovered 0.7 percent to $5,044 a tonne, it was still set to end the week 1.3 percent lower, its third consecutive weekly loss.

Spot gold recovered to $1,109.4 an ounce from an eight-week low on Thursday, on track for a 2.8 percent loss for the week.

Global Stock Market News - The European Central Bank

The dollar declined 0.3 percent to 120.77 yen JPY= after spiking as high as 121.26 on Wednesday from a session low of 120.02.

U.S. Dollar

The dollar index .DXY, which tracks the U.S. currency against a basket of six of its major peers, fell about 0.3 percent to 97.519, but remained near the 2-1/2-month peak of 97.818 scaled after the Fed's statement.

The euro reversed earlier losses, gaining about 0.2 percent to $1.0938 EUR= after skidding to a 2-1/2 month low of $1.0826 overnight.

The European Central Bank last week signaled its readiness to inject more stimulus to boost prices and the People's Bank of China followed with its sixth interest rate cut in less than a year and a reduction in the amount of cash banks must hold as reserves.

Investors are speculating that the Bank of Japan could also expand its easing steps to keep economic recovery on track, but unexpectedly strong industrial output data on Thursday reduced the chance of the BOJ acting at its meeting on Friday.

Japan's Nikkei .N225, which swung between gains and losses, ended the day up 0.2 percent.

The Reserve Bank of New Zealand kept interest rates steady on Thursday as expected but reiterated that some further easing seemed likely eventually.

The New Zealand dollar dropped about 0.5 percent to $0.6663.

U.S. crude oil futures shrugged off the stronger dollar and retained most of their gains after soaring more than 6 percent overnight as the government reported an inventory build-up, which triggered a short-covering rally after three days of losses.

U.S. crude CLc1 fell about 0.6 percent to $45.67 a barrel. Brent LCOc1 slipped 0.6 percent to $48.78.

Spot gold XAU= edged up about 0.5 percent in Asian trade to $1,161.71 an ounce, after skidding more than 1 percent in the previous session in the wake of the Fed's hawkish message.