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GLOBAL MARKETS-Dollar depressed, stocks cheer easy Fed

Published 04/28/2011, 02:29 AM
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* Fed stance keeps risk appetite intact

* Dollar hits fresh three-year lows vs basket of currencies

* U.S. crude rises to 2-1/2 year peaks, gold at all-time highs

* MSCI gauge of Asian stocks excluding Japan reaches 3-yr peak

By Ian Chua

SYDNEY, April 28 (Reuters) - The dollar skidded to three-year lows on Thursday, pushing U.S. crude oil to a 2-1/2 year high, while Asian stocks rose as investors bet that the easy U.S. monetary policy will continue to drive money to riskier assets.

The Bank of Japan (BOJ) also maintained its ultra-loose monetary policy, in moves that are likely to see investors continue using both the dollar and yen as funding currencies to buy higher-yielding assets, commodities and equities.

"With the prospect of ultra easy monetary policy continuing for the foreseeable future in the world's largest economy, traders are feeling more confident about holding the bullish view and risk appetite is expected to be high," said Jonathan Sudaria, a night dealer at Capital Spreads in London.

Japan's Nikkei average rose 1.6 percent, while stocks elsewhere in Asia gained 0.6 percent, having earlier added more than 1 percent to reach a three-year peak.

Japanese markets will be shut on Friday and will reopen on Monday, ahead of more holidays next week.

Earnings from the likes of Honda Motor were due after the market close.

"If earnings continue to impress the market, the Nikkei may rise further," said Makoto Kikuchi, chief executive officer at Myojo Asset Management.

Another indication of the hefty demand for higher-yielding assets and exposure to fast-growing Asian markets was the response to Indonesia's $2.5 billion medium-term note offering this week, which was nearly 3 times oversubscribed, with half the issue snapped up by U.S. investors.

European stock index futures rose in early trade, pointing to a higher open, while gains in U.S. stock index futures indicated the rally on Wall Street may not be over yet.

Deutsche Bank will be in focus after the German bank posted an 18 percent rise in quarterly net profit. [ID:nLDE73R04T]

DOLLAR HAMMERED

The dollar index , which tracks its performance against a basket of major currencies, fell to as low as 72.871 -- a level not seen since July 2008. It last stood at 72.993.

Dealers said several central banks in Asia were spotted buying the greenback to check sharp gains in their currencies.

The euro rose to a 16-month high of $1.4881 , further spurred by stop-loss buying after a breach of option barriers around $1.4800, while the Australian dollar touched a post-float high of $1.0948 .

In the commodities market, U.S. crude scaled a 2-1/2 year peak of $113.70 a barrel, and gold futures raced to a record high at $1,534 an ounce. Copper gained more than 1 percent to around $9,440 a tonne.

U.S. Treasury yields were a touch lower, having risen on Wednesday as the market made room for an upcoming seven-year supply. The two-year yield slipped 1.2 basis points to 0.6368 percent. (Additional reporting by Masayuki Kitano in Singapore and Ayai Tomisawa in Tokyo; Editing by Ramya Venugopal)

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