* Euro set for best week in over two years
* Wall St stocks rally; S&P set for weekly gain
* Oil sharply higher despite oversupply concerns
* European stocks helped after Athens’ assurances (Updates to afternoon trading, recasts lead and adds Nike results)
By Ryan Vlastelica
NEW YORK, March 20 (Reuters) – The U.S. dollar fell sharply on Friday and was on track for its biggest weekly decline against the euro in more than three years, helping to drive a rally in Wall Street stocks and crude oil.
Riskier assets like equities were in general on track for a strong week, largely driven by the Federal Reserve’s policy statement on Wednesday, which struck a more dovish tone than investors had expected. The Fed appeared to argue against an interest rate hike in June.
The dollar index is up more than 20 percent since mid-2014. The dollar’s strength for some time buoyed U.S. stocks because it served as evidence of a growing economy, but lately there have been concerns of the impact on profits of U.S. multinational companies.
U.S. crude futures were on track for their first weekly advance of the past five, while the S&P 500 was set to snap a three-week losing streak. The euro was on pace for its biggest weekly jump against the dollar in more than three years, while the U.S. dollar index was set for its biggest weekly drop since 2011.
The dollar index, which measures the greenback against a basket of currencies, fell 1.7 percent, its biggest one-day decline since October 2011. The euro rose 1.87 percent to $ 1.0859 on Friday, while the yen rose 0.54 percent against the dollar.
“This is just some counter-trend correction in the dollar and is transitory,” said Mark Luschini, chief investment strategist, at Janney Montgomery Scott in Philadelphia.
European equities closed higher. The FTSEurofirst 300 index posted its highest close since mid-2007, finishing up 0.8 percent at 1,610.93. Greek equities rose 2.9 percent after Greek Prime Minister Alexis Tsipras assured European Union creditors his coalition would soon present economic reforms to unlock cash to stave off bankruptcy. In addition, the longer-term weakness of the euro was seen as boosting the region’s economy and corporate earnings.
MSCI (NYSE: MSCI – news) ‘s all-country world index of equity performance in 46 countries rose 1.54 percent.
The Dow Jones industrial average rose 226.52 points, or 1.26 percent, to 18,185.55, the S&P 500 gained 24.13 points, or 1.15 percent, to 2,113.4, and the Nasdaq Composite added 47.84 points, or 0.96 percent, to 5,040.22.
Share (LSE: SHRE.L – news) of Nike Inc (Sao Paolo: NIKE34.SA – news) , a Dow component, jumped 5 percent, to $ 103.40, a day after the company reported strong quarterly results, though it warned about the impact of the dollar on the current quarter.
“The reaction to Nike has been positive and the stock is up nicely. It has been a strong name, but currency is going to have an impact,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
The biotech index rose 0.5, powered by a 9.4 percent gain in Biogen Idec (NasdaqGS: BIIB – news) after the company announced promising results of an early-stage study of its drug to treat Alzheimer’s.
The market may see heightened volatility heading into Friday’s close as a result of quadruple witching: the expiration of stock options, index options, index futures and single-stock futures.
The benchmark 10-year U.S. Treasury note rose 12/32 in price, pushing the yield down to 1.9303 percent.
Brent crude rose 1 percent to $ 54.99 per barrel while U.S. crude futures for April delivery jumped 5 percent to $ 46.17. While concerns remain about oversupply, oil was boosted by the dollar’s decline.
Both gold and silver rose for a third straight session, also helped by the dollar’s weakness. Gold rose 1.2 percent while silver jumped 4.7 percent. Copper rose 3.2 percent. (Additional reporting by Gertrude Chavez-Dreyfuss and Chuck Mikolajczak; Editing by Leslie Adler)