Stock markets and oil prices rallied on Friday, with investors largely pricing in more central bank interest rate hikes aimed at taming surging inflation.
The dollar slid as much as one per cent against the pound and euro after recent hefty gains.
London's stock market jumped 1.2 per cent, mirroring advances in Paris and Frankfurt, while the British capital's exchange mourned the death of Queen Elizabeth II.
"We are deeply saddened at the passing of Her Majesty Queen Elizabeth II," the London Stock Exchange said in a message posted on its website following her death on Thursday.
The LSE is expected to shut on the day of the queen's funeral.
"Markets are being very British about the whole thing, carrying on in a fashion that I suspect she would have approved of," said IG analyst Chris Beauchamp.
Wall Street followed the upbeat European session with a third straight positive day.
The S&P 500 finished at 4,067.36, up 1.5 per cent for the day and 3.6 per cent for the week, snapping a three-week losing stream.
Dollar off highs
The more confident mood across equity and oil markets was reflected in a cooler dollar, which had surged to multi-decade highs against major peers in recent weeks owing to the US Federal Reserve's hawkish tone promising even more interest rate hikes.
"There are hopes that the sharp rate increases from the Fed may already have dampened demand, causing US inflation to weaken," said Fawad Razaqzada, City Index and FOREX.com analyst.
The greenback's softness came even after yet another strong statement from a leading US central banker.
Fed Governor Christopher Waller on Friday was the latest to reaffirm the hawkish stance to combat rising prices.
He warned that lowering inflation will take time and higher rates, and said he supports another "significant increase" in the benchmark lending rate at the September 20-21 policy meeting.
In Asia, Hong Kong rose close to three per cent heading into a long weekend.
There was also some cheer from the news that inflation in China eased slightly in August, giving the government more room to introduce more economy-supporting measures, though the recovery remains hostage to leaders' strict zero-Covid strategy of growth-sapping lockdowns.
The euro was holding well above parity with the dollar, one day after the European Central Bank announced its own 75 basis-point rate increase as it warned inflation was "far too high" and likely to stay above target for "an extended period".
The yen strengthened as officials began speaking up after the unit approached a 32-year low against the greenback.
The pick-up came after Bank of Japan Chief Haruhiko Kuroda met Prime Minister Fumio Kishida on Friday before saying "the rapid weakening of the yen is undesirable".
The talks were seen as a sign of intent to act in support of the currency if it continued to weaken.
Key figures at around 20:50 GMT
New York - Dow: UP 1.2 per cent at 32,151.71 (close)
New York - S&P 500: UP 1.5 per cent at 4,067.36 (close)
New York - Nasdaq: UP 2.1 per cent at 12,112.31 (close)
London - FTSE 100: UP 1.2 per cent at 7,351.07 (close)
Frankfurt - DAX: UP 1.4 per cent at 13,088.21 (close)
Paris - CAC 40: UP 1.4 per cent at 6,212.33 (close)
EURO STOXX 50: UP 1.6 per cent at 3,570.04 (close)
Tokyo - Nikkei 225: UP 0.5 per cent at 28,214.75 (close)
Hong Kong - Hang Seng Index: UP 2.7 per cent at 19,362.25 (close)
Shanghai - Composite: UP 0.8 per cent at 3,262.05 (close)
Euro/dollar: UP at $1.0046 from $0.9998 on Thursday
Pound/dollar: UP at $1.1587 from $1.1504
Euro/pound: DOWN at 86.84 pence from 86.90 pence
Dollar/yen: DOWN at 142.56 yen from 144.07 yen
Brent North Sea crude: UP 4.1 per cent at $92.84 per barrel
West Texas Intermediate: UP 3.9 per cent at $86.79 per barrel
