* Dollar poised for 4th week of gains on Fed rate hike hopes
* Stocks slightly lower, inflows into U.S. stocks persist
* Yellen, Fischer speeches eyed
* Eurozone economic recovery brightens as PMIs rise
* French poll puts Macron in lead, bank stocks rally
By Vikram Subhedar
LONDON, March 3 The dollar retreated on Friday
after two days of gains while world stocks pulled further back
from all-time highs as investors unwound positions on growing
expectations that U.S. interest rates will be hiked later this
Federal Reserve officials have lined up to sing about the
need for higher rates soon, sending the implied probability of a
move this month surging to 74 percent, from just 30 percent at
the start of the week.
Fed Chair Janet Yellen and Vice Chair Stanley Fischer are
both due to speak later on Friday and are expected to stick to
the same tune.
U.S. stock futures were slightly lower, down 0.1
percent. Europe's benchmark STOXX 600 eased although it
was on track to end the week up more than one percent.
French stocks outperformed on the day, with the bluechip CAC
40 rising 0.7 percent, led by banking shares, as
far-right candidate Marine Le Pen's chances in the country's
presidential election dimmed.
The euro rose and the gap between French and German
10-year government bond yields fell to its lowest in a month.
Signs that centrist Emmanuel Macron is gaining ground in the
race to be France's next president have helped calm markets
fearful that anti-euro Le Pen could deliver an electoral shock
like those in Britain and the United States last year.
"We saw a peak of panic in February when the focus was on Le
Pen," said DZ Bank strategist Christian Lenk. "It's always been
clear that the odds of Le Pen becoming the next president were
quite low and now we see confirmation of that in the polls."
Meanwhile, economic data in Europe continued to point to a
brightening recovery, with euro zone business activity growing
at its quickest pace in nearly six years in February and job
creation reaching its fastest in almost a decade.
The dollar index, which measures the greenback's strength
against a basket of six major currencies, eased about 0.1
percent but was poised for its fourth straight weekly gain.
"The U.S. dollar has been snapped up across the board as a
March Fed hike is heavily priced in," said Sean Callow, a senior
currency strategist at Westpac.
"All it took was about a hundred comments from Fed
officials, but markets have finally decided that "fairly soon"
means less than two weeks and that perhaps three hikes this year
means three hikes this year."
Expectations of a Fed rate hike soured the party on Wall
Street, however, as financials led major U.S. indices lower.
They remain close to record highs.
The total market value of global stock markets hit an
all-time high of $56.7 trillion earlier this week, having added
more than $4 trillion since Donald Trump's election as U.S.
president last November.
More than half of those gains were down to the rally in U.S.
stocks, into which investors have pumped money for four of the
past five weeks, according to the latest data from Bank of
America Merrill Lynch and fund tracker EPFR.
Investors flocked to buy shares of the hottest technology
stock offering in three years, spurring a 44 percent pop on the
first day of trading for Snap Inc, the owner of
messaging app Snapchat. Its debut saw the loss-making company's
market valuation soar to $28 billion.
In commodities, oil prices rose as the dollar edged away
from a multi-week high, though gains were held in check by
unchanged Russian output for February, a sign of its weak
compliance on a global deal to cut supplies.
Benchmark Brent crude futures were up 0.3 percent at
$55.26 a barrel after closing down 2.3 percent in the previous
session. WTI futures gained 16 cents, or 0.3 percent, to
(Additional reporting by Dhara Ranasighe and Wayne Cole in
SYDNEY; Editing by Catherine Evans)