World stocks were on track on Friday for one of their largest weekly gains in 20 years, propelled by growing confidence in the recovery of the U.S. banking system.
The Swiss franc fell sharply, a day after the Swiss National Bank intervened to weaken the currency to make it more competitive, a move that triggered some concerns about countries embarking on a currency war.
MSCI's all-country stock index <.MIWD00000PUS>, a benchmark for global equities, was up 1.6 percent, raising the week-to-date gain to 8.4 percent.
Such a weekly gain, if it is sustained, would be eclipsed recently only by two massive rises in November and December last year.
Catalysts for much of Friday's gain were signs that the U.S. banking system may be stabilizing. Bank of America
The comments echoed statements by Citigroup
The economic situation seems to be better than what people were saying at the beginning of the year -- a view that has come about now that it seems that U.S. banks' earnings may not be atrocious, said Masaru Hamasaki, senior strategist at Toyota Asset Management in Tokyo.
The pan-European FTSEurofirst 300 <.FTEU3> was up nearly 2 percent, while Japan's volatile Nikkei average <.N225> closed up 5.15 percent on the day.
The Swiss franc was in focus on currency markets after Thursday's central bank rate cut and announcement it would buy foreign currencies.
After the moves the euro rose more than 3 percent and the dollar more than 2.5 percent against the franc. There was further firming early on Friday.
The euro was up a quarter of a percent at 1.5348 francs, but the dollar dropped back to flat on the day after rising earlier.
The dollar, meanwhile, was weaker against most major currencies. The euro gained 0.2 percent to $1.2936.
On euro zone debt markets, the Bund future was having its biggest weekly loss since December 2001, in both nominal and percentage terms.
The 10-year cash Bund yield was up 7 basis points at 3.083 percent. The interest rate-sensitive two-year Schatz yield was up 3 basis points at 1.363 percent. Bond yields move inversely with prices.
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(Editing by Jon Boyle)