* Euro surges on ECB tapering hopes; sterling up
* Wall St hits record highs on earnings optimism, data
* U.S. yields up on inflation, 2-year highest since 2008
* Oil prices rise for a sixth day
(Updates with U.S. markets' closing levels)
By Caroline Valetkevitch
NEW YORK, Jan 12 (Reuters) - The U.S. dollar fell to a more
than three-year low against the euro on Friday, extending recent
losses on expectations European Central Bank policymakers are
preparing to reduce stimulus, while U.S. stocks continued to
rally and marked record closing highs.
Optimism about fourth-quarter earnings boosted stocks. Bank
shares climbed following quarterly results from JPMorgan Chase &
Co and Wells Fargo. A global stock index
registered an eighth straight week of gains.
The euro's rise weighed on the dollar index, which
measures the greenback against six rival currencies. The index
was down 1 percent, after slipping to a four-month low of
For the year, the dollar index was down 1.28 percent, its
worst performance over a year's first nine trading days since
2010, according to Reuters data.
"The latest ECB comments were a bit on the hawkish side, so
that's giving more life to the euro," said Minh Trang, senior
currency trader at Silicon Valley Bank in Santa Clara,
Sterling rocketed to its highest level against the
dollar since the Brexit vote to leave the European Union after a
report that the Netherlands and Spain were open to a deal for
Britain to remain as close as possible to the trading bloc.
Sterling was last trading at $1.3731, up 0.03 percent.
The S&P 500 and Nasdaq both registered an eighth record
closing high out of the first nine trading days of 2018, while
the Dow boasted its sixth closing high of the year.
Data showing robust U.S. retail sales drove investor
optimism about economic growth, also boosting sentiment in the
"It seems like the economy is going OK, inflation is kind of
nonexistent right now, wage growth is not an issue for most
income statements, so what's not to like here?" said Stephen
Massocca, senior vice president at Wedbush Securities in San
The Dow Jones Industrial Average rose 228.46 points,
or 0.89 percent, to 25,803.19, the S&P 500 gained 18.68
points, or 0.67 percent, to 2,786.24, and the Nasdaq Composite
added 49.29 points, or 0.68 percent, to 7,261.06.
The pan-European FTSEurofirst 300 index rose 0.23
percent, and MSCI's gauge of stocks across the globe
gained 0.66 percent.
A robust U.S. inflation report boosted Treasury yields.
The two-year yield, sensitive to traders' views
on interest rates, rose to more than 2 percent for the first
time since the financial crisis.
In commodities, oil prices rose for a sixth day after
Russia's oil minister said global crude supplies were "not
balanced yet," alleviating market concerns about a wind-down of
the OPEC-led deal to reduce production.
U.S crude oil rose 50 cents to settle at $64.30 a
barrel, while Brent rose 61 cents to settle at $69.87.
(Additional reporting by Marc Jones in Helen Reid in London and
Kate Duguid and Saqib Aqbal Ahmed in New York; Editing by Nick
Zieminski and Leslie Adler)
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