World stocks hit record highs, having gained 11 per cent so far this year, and the dollar recovered more ground on Friday as upbeat US economic data allayed concerns over growth ahead of payrolls figures due out later in the day.
Robust US jobs numbers should cement expectations of a Federal Reserve Board (Fed) interest rate hike at its June 13-14 policy meeting.
The dollar, coming out of its worst fortnight in a year against the euro and the basket of currencies used to measure its broader strength on concern over the Trump administration's ability to deliver a substantial boost to growth, clawed back some of those losses. The greenback was up 0.1 per cent against the yen.
“The move this morning is in dollar yen,” said Niels Christiansen, a Strategist with Sweden's Nordea Bank.
“The numbers were good and records made in equities, if anything, are positive. We will certainly be looking at the wage numbers today. They are crucial for inflation and rate outlook,” he added.
A strong payrolls report would effectively seal the case for a Fed rate hike this month despite sluggish wage gains.
Non-farm payrolls are estimated to be increased by 185,000 jobs in May according to a Reuters survey of economists
Forecasts from Fed officials suggest that a median of two more hikes are planned before the end of the year.
Data showing a healthy uptick in private sector hiring and factory activity during May bolstered believes on the U.S. economy picking up speed and lifted stocks on Wall Street after two days of losses. Those gains filtered through to global stocks, lifting the MSCI All-Country World index by 0.3 per cent to a record high.
Stocks in Europe joined the party with Euro Zone blue-chips and UK's FTSE 100 up by 0.9 and 0.4 per cent respectively and nearing their highest levels so far.
In commodities, oil prices resumed their slide with key future contracts down more than 2 per cent amid worries that U.S. President Donald Trump's decision to abandon a global climate pact could spark more crude drilling in the United States, stoking a persistent glut in global supply.
Global benchmark Brent crude futures fell to $49.63 a barrel, while U.S. West Texas Intermediate crude dropped by more than a dollar to $47.36 per barrel.
A stronger dollar and broadly buoyant global stock markets dented appetite for safe-haven gold, which hit its lowest levels in a week.