* World FX rates in 2017 tmsnrt.rs/2egbfVh
* Brent crude top $54 per barrel on OPEC hopes
* Defense stocks lift Wall Street on US-Saudi arms deal
* Dollar slides after opening higher
(Adds US market open, Treasuries; changes dateline to New York;
By Hilary Russ
NEW YORK, May 22 The euro surged to a more than
six-month high on Monday after German Chancellor Angela Merkel
said it was "too weak," while oil prices were bolstered by
expectations that top exporters will extend supply curbs this
A one-month high for oil futures on hopes of a
supply cut by the Organization of the Petroleum Exporting
Countries helped Asian shares to their best session in weeks.
U.S. crude rose 0.61 percent to $50.98 per barrel
and Brent was at $53.80, up 0.35 percent on the day.
European shares struggled to maintain momentum, but the U.S.
stock market gained, lifted by defense and tech stocks, after
U.S. President Donald Trump announced arms deals of up to $350
billion with Saudi Arabia over the weekend.
The Dow Jones Industrial Average rose 68.11 points,
or 0.33 percent, to 20,872.95, the S&P 500 gained 8.04
points, or 0.34 percent, to 2,389.77 and the Nasdaq Composite
added 33.64 points, or 0.55 percent, to 6,117.35.
The pan-European FTSEurofirst 300 index lost 0.09
percent and MSCI's gauge of stocks across the globe
gained 0.43 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan
closed 1.05 percent higher, while Japan's Nikkei
rose 0.45 percent.
Currency markets flipped 180 degrees as Merkel, during a
trip to a Berlin school, made a surprise reference to the euro
being weak because of the European Central Bank's ultra-low
interest rates and money printing program.
Until that point, the single currency had been in the
red, but the comments saw it swiftly climb to a six-month high
$1.1250 and bring the morning's rebound in the dollar to an
abrupt halt. The euro was last up 0.22 percent at $1.1229.
"The thing with euro/dollar is that you have quite a
positive mood on the euro at the moment," said ABN Amro FX
strategist Georgette Boele. "And when Merkel makes comments that
the euro is probably too low then this is taken as another
positive reason to push it higher."
Sterling was also in the firing line, last trading at
$1.3002, down 0.25 percent on the day, as polls showed the
country's election race tightening. Britain's chief Brexit
negotiator again threatened to walk away from EU exit talks
unless the bloc eased its demands.
"Last week was all about U.S. uncertainty but we have had a
reminder that Europe still has plenty of uncertainty too," said
Alvin Tan at Societe Generale.
Against a basket of currencies, the dollar opened higher
after closing lower on Friday, when it had its largest weekly
drop since April 2016. But on Monday, it quickly lost steam,
falling back to low levels where it was trading in November. The
dollar index fell 0.15 percent.
U.S. Treasury yields were little changed as selling tied to
this week's government and corporate bond supply offset
safe-haven bids underpinned by worries about investigations into
possible links between Trump's campaign officials and Russia.
The benchmark 10-year Treasury yield was last at
Spot gold added 0.4 percent to $1,259.47 an ounce.
U.S. gold futures gained 0.52 percent to $1,260.10 an
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Marc Jones in London, Tanya Agrawal in
Bengaluru, and Richard Leong in New York; Editing by Bernadette