Better risk appetite in turn helped the Australian dollar to a 2-week high, with the Aussie further boosted when the Reserve Bank of Australia held rates steady for a fifth month.
The cheer was expected to extend into European trading, with financial spreadbetters predicting Britain’s FTSE 100 would open up 0.4 percent.
“We believe that these central bank policies will work”, said Kreuzkamp, the Frankfurt-based chief investment officer at Deutsche Asset & Wealth Management for Europe, the Middle East and Africa, which oversees $1.3 trillion.
Chinese stock markets, which have been hit by wild swings in recent months due to growth and policy worries, rallied after re-opening following an extended break since the end of September.
Japanese shares garnered further momentum from speculation that the Bank of Japan (BOJ) might expand its massive stimulus programme to support the flagging economy. But a surprise can not be ruled out, and pressure is building on the central bank to act.
Gold briefly rallied following the Fed minutes but then turned lower.
John Plassard, senior equity sales trader at Mirabaud Securities, said of Deutsche Bank’s warning: “We could see more and more big writedowns hit a sector which thought it was starting to come to terms with the big restructurings in the wake of the 2008 crisis”.
Markets in the region continued to benefit from the Trans-Pacific Partnership agreement signed on Monday by the United States, Canada, Japan and nine other countries, including Australia.
Diminishing expectations that the U.S. Federal Reserve will raise interest rates this year could allow the yen to strengthen, precipitating another round of monetary easing by the Bank of Japan, BOJ watchers say.
Brent and WTI had gained around 8 percent, or about $4, over the past three days, breaking above a month-long trading range.
US crude futures managed to climb above its late August peak to hit their highest level since late July, rising to as high as $49.44.
The dollar was mixed against major currencies as the headwinds from fading expectations for a Fed hike were countered by positive risk sentiment.
The Wall Street Journal Dollar Index, which gauges the buck against a basket of 16 currencies, was recently down 0.3% at 87.66, its lowest level since September 17.
The USA dollar held its ground against major currencies, buying 120.45 yen in Tokyo - little changed from 120.46 yen in New York overnight.
The Indonesian rupiah, which has been hammered by the greenback in the past year, surged 2.6 percent although it is still around 17-year lows, while resources-dependent Malaysia’s ringgit added 2.01 percent thanks to the uptick in oil prices.
The greenback fell 1.5 percent in the past week, making it the second worst performer after the yen among 10 developed-nation currencies, according to Bloomberg Correlation-Weighted Indexes.
The euro stood at US$1.1182 and 134.71 yen compared with US$1.1187 and 134.77 yen in New York.
