US open: Dow rallies on weak dollar and rising oil prices

US stocks rallied early on Wednesday, as investors sought to capitalise on the weak dollar.

Just after 15:00 BST, the Dow Jones Industrial Average was up 149 points, while the S&P 500 and the Nasdaq were 12 and 21 points higher, respectively.

Dollar slumps

The dollar slumped 1.23% against the yen after Bank of Japan Governor Haruhiko Kuroda suggested the Japanese currency won’t fall further as the real effective exchange rate is already “very weak”.

The greenback lost 0.85% against the pound and 0.18% against the euro, while gold futures climbed 1% to $1,189.40.

“Regardless of the issues hanging over the euro and sterling, both have clawed back ground against a US dollar that has been found to be less able to raise interest rates than initially believed,” said IG’s market analyst Alastair McCaig.

Elsewhere, German 10-year bund yields broke above the 1% threshold for the first time since September, while oil benchmarks maintained previous session’s highs in European trading continuing a sequence of bullish calls in anticipation of US inventories declining further.

West Texas rose 2.21% to $61.50 a barrel, while Brent gained 1.61% to $65.94 a barrel.

European stocks struggled for direction as concerns over Greece’s future showed no sign of abating, while markets in Asia closed mixed.

“Greek uncertainty is still very apparent in the markets and is likely to continue to weigh on investor sentiment,” said Oanda’s senior market analyst Craig Erlam.

“There are signs of occasional progress but there is very much a case of two steps forwards and one step back about this process.”

Wednesday data

Applications for US home mortgages rose in the week to 5 June, while interest rates hit their highest level since November.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity climbed 8.4% last week.

In company news, clothing retailer Oxford Industries rose 7.27% in pre-market trading after announcing late on Tuesday that its earnings had beat expectations.

Online streaming service Netflix climbed 1.37% ahead of the bell after its shares hit a year-high price of $649 on Tuesday.

HCC Insurance jumped 35.8% ahead of the bell after agreeing to a $7.5bn takeover offer from Tokio Marine Holdings.