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GLOBAL MARKETS-Dollar cruises to third weekly win, stocks bounce
(Adds U.S (Other OTC: UBGXF - news) . market open, byline, dateline; previous LONDON)
* Oil eases as focus returns to oversupply
* Dollar heads for third week of gains
* Gold (Other OTC: GDCWF - news) poised for biggest weekly drop in 8 weeks
By Herbert Lash
NEW YORK, May 20 (Reuters) - Global equity markets rose on Friday as investors took in stride growing expectations the Federal Reserve will hike interest rates in June, a notion that helped U.S. bond yields to rise and lifted the dollar to a third straight week of gains.
U.S. home resales rose more than expected in April, suggesting the American economy continues to gather pace during the second quarter. The data added to a growing perception the U.S. economy will be able to withstand a rate hike next month or in July.
Wall Street opened higher, following gains in Europe, with the S&P financial sector index rising 1 percent as recent comments from Fed officials suggested the possibility of a rate increase as early as June.
New York Fed President William Dudley on Thursday said the U.S. economy was strong enough to warrant a hike.
MSCI (NYSE: MSCI - news) 's all-country world stock index rose 0.72 percent and the pan-European FTSEurofirst 300 index of leading regional stocks rose 1 percent to 1,323.76 points.
On Wall Street, the Dow Jones industrial average rose 126.29 points, or 0.72 percent, to 17,561.69. The S&P 500 gained 16.38 points, or 0.8 percent, to 2,056.42 and the Nasdaq Composite added 60.17 points, or 1.28 percent, to 4,772.70.
The dollar traded close to two-month highs after it pushed past $1.12 per euro for the first time since March. Sterling was set for its strongest week against the euro since October as fears abated that Britain would leave the European Union, a situation that has widely been described as 'Brexit,' next month after a vote.
"The question for traders now is whether this Fed rate hike issue is a 'risk-on' or a 'risk-off' situation," said Saxo Bank FX strategist John Hardy.
"Our interpretation is that they want to do a June move, especially now Brexit chances seem to have dropped right off."
The dollar index was slightly higher at 95.417 after reaching 95.502 overnight, a level last seen on March 29.
Against the yen, the dollar gained 0.51 percent to set another three-week high of 110.58 yen. The euro rose 0.02 percent against the dollar at $1.1204.
Oil prices were mostly flat as investors cashed in on recent gains and focus shifted again to swelling global inventories that have cushioned the impact of a series on unplanned supply outages.
Global benchmark Brent crude prices edged 9 cents higher at $48.90 a barrel.
U.S. West Texas Intermediate (WTI) crude futures traded up 2 cents at $48.18 a barrel.
U.S. Treasury yields, which move in the opposite direction of prices, rose to their highest in about two months.
Benchmark U.S. 10-year notes fell 1/32 in price, pushing their yield up to 1.8506 percent. Earlier yields hit 1.868 percent.
(Editing by Bernadette Baum)
