WASHINGTON — The dollar weakened against all its major peers while stocks rose with treasuries as Lawrence Summers withdrew his bid to become Federal Reserve chairman.
Crude oil fell after the United States and Russia agreed on a plan to eliminate Syria’s chemical weapons.
US Dollar Index dropped 0,5% at 8:51am in London.
The MSCI All-Country World Index increased 0,6% to the highest level since June 2008 and Standard & Poor’s 500 Index futures jumped 1%.
The yield on 10-year US treasuries declined eight basis points to 2,80% and the rate on German bonds fell five basis points. Brent crude sank 1,5%, while corporate bond risk slid to a three-month low.
The Turkish lira climbed the most since December 2011.
Summers, a former Treasury secretary, would have tightened Fed policy more than Janet Yellen, who was his main rival to replace Chairman Ben Bernanke, according to a Bloomberg Global Poll last week.
The Fed will probably taper its monthly bond-buying program by $10 billion to $75 billion this week, a separate survey of economists showed.
The US-Russia agreement establishes a framework for finding, securing and destroying President Bashar al-Assad’s stocks of poison gas.
“The market prefers Yellen. She would be the smoothest continuation of existing policy,” Phil Orlando, the New York-based chief equity strategist at Federated Investors Inc, which manages about $380 billion in assets, said.
“We know they will probably initiate the taper at the next Federal Open Market Committee and that they will start with about $10 billion. Therefore the passing of the baton is important.”