US stocks rose to a five-and-a-half month high yesterday as a falling dollar, partly driven by expectations of further stimulus by the Federal Reserve, prompted investors to buy riskier assets.
The Dow Jones industrial average gained 31.49 points, or 0.28 per cent, to 11,164.05. The Standard & Poor’s 500 Index added 2.54 points, or 0.21 per cent, to 1,185.62. The Nasdaq Composite Index advanced 11.46 points, or 0.46 per cent, to 2,490.85.
The slide in the greenback continued after a weekend meeting of the G20 stopped short of setting targets to reduce trade imbalances.
Bets the Fed will stimulate growth by effectively printing money to buy assets has weakened the dollar, which in turn has lifted commodity prices.
Equities and the dollar have formed an inverse relationship, so as the dollar drops, equities often advance. Since 1 September, the S&P has risen 13 per cent while the dollar index, which measures its value against major currencies, has lost 7.4 per cent. The S&P 500 index ended at its highest since 3 May.