Brent hits $70 per barrel before retreating; equities rise with energy

DailyFX US AM Digest US Dollar at Three Year Low versus the Euro

Brent hits $70 per barrel before retreating; equities rise with energy

The minutes showed a "very positive" growth outlook from the ECB's top economists, with a "prolonged period" of above-potential growth expected. It was on track for a more than 1.5 percent rise since Thursday - its strongest two-day performance since August.

A change in the ECB's policy message would probably be taken by investors as a sign that rate-setters are getting ready to wind down their 2.55 trillion euro bond-buying program, the key plant of their policy for the past three years.

The US dollar index traded marginally lower on Friday, extending the notable losses it posted on Thursday on the back of weaker-than-expected US producer price data and a stronger euro.

Abridged minutes of a December meeting of the European Central Bank governing council said there was a "widely shared" view among officials that communication would need to evolve gradually based on the outlook for growth and inflation.

The euro jumped in value against the USA dollar after the minutes were released, gaining more than 0.8 per cent at the time of writing to hit highs of $1.2049, moving back towards three-year highs achieved at the start of the year. Yet it still suggested consumer spending had made a sizeable contribution to economic growth for the fourth quarter as a whole, after a disappointing third quarter.

MSCI's broadest gauge of the world's stock markets also hit a record high on Thursday, having risen in seven of the eight business days so far this year for a total increase of 3.3 percent.

"We all know that the European Central Bank tapering is coming but now it's about the timing, and yesterday's minutes suggested there's a growing dissent among European Central Bank members about waiting too long", said ING currency strategist Petr Krpata in London.

DailyFX US AM Digest US Dollar at Three Year Low versus the Euro

The kiwi gained to 4.7080 Chinese yuan from 4.6838 yuan on Thursday after the Chinese government quashed speculation it was considering cutting its purchases of US Treasuries.

Dow Jones closed up by 0.80 percent, S&P 500 ended up 0.70 percent, Nasdaq finished the day up by 0.79 percent.

The BOJ kicked things off Tuesday by cutting purchases of long-dated Japanese government bonds, spurring bets it may also tweak its yield-curve control policy.

Spot gold was up 0.5 percent at $1,322.74 an ounce by 1:37 p.m. EST (1837 GMT) after touching $1,326.56 on Wednesday, the highest since September 15. "That helps explain the demand picture which has oil up at $70", said Scott Clemons, chief investment strategist at Brown Brothers Harriman, in NY.

But growth is into its fifth year, employment is at a record high and convergence between the 19-member currency bloc's core and periphery has restarted, all pointing to unabated growth and a declining need for central bank help.

Brent crude futures settled 6 cents higher at United States dollars 69.26 a barrel on Thursday, after hitting USD 70.05 a barrel during the session, its highest level since November 2014.

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