Fed stimulus comments boost stocks to best week in 8 months

Reassuring comments from the U.S. Federal Reserve on its stimulus programme helped boost world stocks to their best week in eight months on Friday, while the dollar bounced as focus switched to U.S. earnings and the Chinese economy.
Wall Street was expected to see a tentative start to the day after its record high finish on Thursday, with investors starting to digest a clutch of earnings reports from top American banks including JP Morgan and Wells Fargo.
European shares rose steadily through the day as investors shrugged off some caution in Asia after China's finance minister doused hopes of fresh stimulus, saying growth of below 7% was acceptable for Beijing.
The broad FTSEurofirst 300 was up 0.5% ahead of the U.S. open and was more than 3% higher on the week, while MSCI's world index looked on course for its best week since November.
This week's rally in financial markets has spread across stocks and bonds to oil and metals and been driven by hints from the Fed that it may not be as eager to phase out its support as markets had started to believe.
After a week of swings in the world's big currencies, foreign exchange markets were trading in a calmer fashion, though positioning had started ahead of Chinese growth data due on Monday.
The dollar index, which plots the greenback's performance against a basket of major currencies, bounced off 2 1/2 week lows, having slumped more than 2% since Fed Chairman Ben Bernanke assured it would remain in support mode. That was the steepest fall in four years, normally seen only during financial crises.
The euro slipped to $1.3024, having jumped as far as $1.3208 on Thursday though it was well off this week's trough of $1.2755.
One of the European Central Bank's top policymakers, Peter Praet, added to the pressure on the currency, saying the bank will keep interest rates at current levels or cut them even further, as long as inflation remains moderate.
Commodity markets have also enjoyed a strong run this week as the talk of continuing central bank support has bolstered hopes of a pickup in global growth.
Gold eased 1% after four days of gains, having earlier been on track for its biggest weekly gain in nearly two years. Copper was still cruising to its best week in two months although it dipped back 0.7% to below $7,000 a tonne.
Disappointing Chinese growth data on Monday could hurt commodities, though, while commodity-related currencies such as the Australian dollar would also be vulnerable.
After their recent turbulence, emerging market stocks were heading for a rare week of gains, recouping some of the 11% they have shed since the Fed started making noises about slowing its money printing programme.
Brent oil was steady at just under $108 a barrel, having hit a three-month high on Thursday as the prospect of more supply from non-OPEC producers and concerns about China's demand growth capped gains.