Global stocks rallied on Monday while the dollar retreated after Federal Reserve Chairman Ben Bernanke said that in order to reduce unemployment, easy monetary policy should stay in place. The benchmark S&P 500 index closed at its highest level since May 2008.
Bernanke, speaking to the National Association for Business Economics, said accommodative monetary policy would support demand and, over time, drive down long-term unemployment.
His comments supported views that easy monetary policy would remain in place for some time and fanned expectations for more Fed asset purchases. Previous rounds of quantitative easing have weakened the dollar and boosted US and global stocks.
Gains in US equities pushed the S&P 500 to a more than 12% gain so far this year, setting it on track for its best quarter since 2009. The advance has been fuelled by months of better-than-expected US economic data as investors' focus shifts away from the euro zone debt crisis.
The Dow Jones industrial average gained 160.90 points, or 1.23%, to end at 13,241.63. The Standard & Poor's 500 Index .SPX was up 19.40 points, or 1.39%, at 1,416.51. The Nasdaq Composite Index .IXIC was up 54.65 points, or 1.78%, at 3,122.57.
Meanwhile the Euro hit its highest level against the greenback in more than three weeks. The US currency slid to a more than three-week low against the Swiss franc.
The Euro rose as high as 1.3367, its highest level since February 29 and against the Swiss franc, the dollar dipped as low as 0.9018, its lowest since March 1.
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