Currencies
The yen fell broadly on Monday as euphoria over the bond insurance sector boosted the appeal of stocks and other risky assets, helping to underpin high-yielding currencies like the New Zealand dollar.
The dollar raced to a session high of 108.21 yen before retreating in late trade to around 108.06 yen, still up 0.8 percent on the day. The Euro jumped to a five-week high of 160.41 and last traded up 0.7 percent at 160.19 yen.
The Euro was little changed at $1.4824, taking a breather after hitting a three-week peak of about $1.4862 on Friday.
Global stocks have gained on hopes of the Ambac bailout, with Japan's Nikkei index closing at a six-week high.
Ambac, which insures municipal bonds as well as other forms of debt, is facing billions of dollars of expected losses from guaranteeing repackaged risky subprime mortgages.
The New Zealand dollar, which has the highest interest rates among industrialized countries at 8.25 percent, rose to levels not seen since it was floated 23 years ago.
The kiwi hit a high near $0.8114, before slipping to trade little changed at $0.8091. It advanced 0.7 percent against the yen to 87.35 yen.
The Canadian dollar was also a big winner on the day. The U.S. dollar fell 1.6 percent to C$0.9952. Against the yen, the Canadian dollar rose 1.3 percent to 107.41 yen.
The yen often suffers in times of rising risk appetite because investors borrow it at low Japanese interest rates to fund "carry trades" that invest in higher-yielding currencies and assets.
Energy
U.S. crude oil futures ended higher on Monday as traders weighed geopolitical turmoil and OPEC's upcoming policy meeting against rising inventories and the risk of economic slowdown.
On the New York Mercantile Exchange, April crude settled up 42 cents or 0.43 percent at $99.23 a barrel, trading from $97.75 to $99.70. Prices are up for the seventh time in the last eight sessions and hit a record $101.32 on Feb. 20.
In London, April Brent crude ended 68 cents or 0.7 percent higher at $97.69 a barrel, moving from $96.34 to $97.92.
Ahead of the Organization of the Petroleum Exporting Countries' March 5 policy meeting, analysts pointed to Turkey's incursion into northern Iraq, Iran's nuclear program dispute with the West and Venezuela's battle with Exxon Mobil Corp
Precious metals
Gold fell 1 percent on Monday after a U.S. official said that Congress could support gold sales by the International Monetary Fund (IMF), stirring fears that such sales will take a toll on sentiment and weigh heavily on bullion.
The sale of the gold requires U.S. congressional approval and an 85 percent majority vote of the IMF's board of member countries. The U.S. Congress has in the past opposed gold sales to fill IMF's income gap.
Spot Gold fell as low as $933.50 an ounce and was at $937.80/938.60 at 19:15 GMT, against its Friday's late quote of $943.70/944.50 in New York. It hit a record high of $953.60 last week.
Stock Indices
U.S. stocks rose more than 1 percent on Monday on signs the two largest bond insurers would stabilize, bringing a wave of relief to a market dogged by concerns of further bank write-downs.
Energy shares also surged, helping to pull the Dow higher, after oil approached $100 per barrel partly on speculation that OPEC may cut supply at a meeting next week.
Financial shares recovered from sharp early losses after Standard & Poor's removed its threat to downgrade MBIA Inc's "AAA" rating. MBIA jumped 19.7 percent while rival Ambac Financial Group Inc ABK.N , which is said to be near a deal to shore up its financial position, shot up 15.9 percent.
The Dow Jones industrial average surged 189.20 points, or 1.53 percent, to 12,570.22. The Standard & Poor's 500 Index gained 18.69 points, or 1.38 percent, to 1,371.80. The Nasdaq Composite Index rose 24.13 points, or 1.05 percent, to 2,327.48.
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