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(Bloomberg) — The dollar traded at a three-week low even after Federal Reserve officials continued to back the case for higher interest rates this year, spurring gains in emerging- market assets. U.S. stocks held at their highest level in seven weeks in light holiday trading.

The greenback maintained losses versus most of its major peers, with currencies of resource-rich nations extending gains, led by the New Zealand and Australian dollars. The Standard & Poor’s 500 Index eked out a 0.1 percent climb, its ninth advance in 10 days, and Asian shares rose, while stocks in Europe halted a six-day rally. Oil sank the most in six weeks after OPEC reported its steepest output in three years.

Fed Vice Chairman Stanley Fischer became the latest policy maker to back the case for a potential increase in rates by the end of 2015. U.S. stocks edged higher after their best week of the year as investors awaited company earnings to help gauge the strength of the economy. Oil’s slide halted a rebound in commodities, which had climbed as China took steps to revive its faltering economy.

“As long as earnings are fair or better than the expectations, I think we’re going to be OK,” said Andrew Brenner, the head of international fixed income for National Alliance Capital Markets. “All of a sudden people are saying well, China’s not so bad. Emerging markets are coming back. Oil is coming back. I’m optimistic between now and year-end.”

Stocks
The S&P 500 rose to 2,017.46 by 4 p.m. in New York, its highest close since Aug. 20. Trading volumes were 29 percent below the 30-day average with bond markets closed for the Columbus Day federal holiday. The equities benchmark jumped 3.3 percent last week and has rallied 8 percent from its August low.

EMC Corp. climbed 1.8 percent after Dell Inc. offered to buy the data-storage provider in a deal worth about $67 billion. Some 35 S&P 500 companies are scheduled to report results this week, including Johnson & Johnson, Intel Corp. and JPMorgan Chase and Co.

The Stoxx 600 fell 0.3 percent to end its longest winning streak since July.The gauge climbed 4.3 percent last week, following its worst quarterly slide since 2011, as investors speculated the Fed won’t rush to raise rates and commodity producers rallied. The MSCI Asia Pacific Index extended gains, rising 0.6 percent to its highest level since Aug. 20 with Japanese markets shut for a holiday.

Currencies
The Bloomberg Dollar Spot Index, which measures the currency against 10 major counterparts, slipped less than 0.1 percent, after touching its lowest level since Sept. 18.

The gauge of the U.S. currency languished even after Fischer said the U.S. economy may be strong enough to merit an rate increase by year end, while cautioning that policy makers are monitoring slower domestic job growth and international developments in deciding the precise timing of liftoff. His comments had little impact on Fed funds futures, which are still pricing in odds below 40 percent that the Fed will tighten policy this year.
The dollar weakened 0.2 percent to 120.04 yen as the euro held onto a two-day gain, trading little changed at $1.1358. The kiwi dollar climbed 0.5 percent to 67.18 U.S. cents, while the Aussie strengthened for a ninth straight day, its longest rally since 2009.

Commodities
Bloomberg’s commodity index fell 1.1 percent for its first decline in three days. Oil futures sank 5.1 percent to $47.10 per barrel in New York, failing to hold above $50 for a third straight day. Brent slumped 5.3 percent to end the session at $49.86 in London.

The Organization of Petroleum Exporting Countries produced 31.57 million barrels a day last month, the most since 2012, according to its monthly report. The market may be “balanced” in 2016 as demand grows and non-OPEC supply shrinks, OPEC Secretary General Abdalla Salem El-Badri, said at a conference in Kuwait City on Monday.

Gold futures for December delivery gained 0.7 percent to settle at $1,164.50 an ounce after rising to $1,168.60, the highest level since Aug. 24. Bullion rose in three of the past four weeks, rebounding from a five-year low in July, on speculation that the Fed will refrain from tightening monetary policy until next year.

Emerging Markets
The MSCI Emerging Markets Index gained 0.7 percent for its highest close since Aug. 11.Deposits into emerging-market ETFs that invest across developing nations as well as those that target specific countries totaled $936 million in the week ended Oct. 9, compared with withdrawals of $828 million over the two previous periods, according to data compiled by Bloomberg.
The Shanghai Composite Index climbed 3.3 percent and the Hang Seng China Enterprises Index advanced 1.3 percent Monday. The People’s Bank of China announced over the weekend it will expand a re-lending trial to nine more cities and provinces, while Premier Li Keqiang said the government will increase fiscal support for shantytown redevelopment.

The yuan strengthened 0.3 percent in offshore trading to its strongest level since Aug. 11 as the central bank raised its fixing rate for the currency and more signaled support for the exchange rate. China’s devaluation of the yuan in August ignited a global wave of risk aversion that sent equities worldwide down the most since 2011 in the third quarter.
Taiwan’s dollar rose 0.9 percent, its biggest gain in more than four years, tracking the yuan. China is the island’s largest export market.

Bonds
German government bonds advanced amid speculation data this week will highlight weakness in the euro region’s economic recovery, supporting demand for safer assets. Ten-year bund yields fell four basis points, or 0.04 percentage point, to 0.58 percent, after climbing 11 basis points last week. Rates on similar-maturity Spanish bonds slipped two basis points to 1.81 percent.

All of the region’s five largest economies are due to hold bond sales this week and Portugal is set to auction bonds for the first time since July. The supply is close to 30 billion euros ($34 billion), almost 50 percent above the year-to-date weekly average, according to Commerzbank AG, which is ranked first among dealers by Germany’s debt agency.

–With assistance from Nick Gentle in Hong Kong, Stephen Kirkland, David Goodman, Namitha Jagadeesh, Lars Paulsson and Kelly Gilblom in London, Kate Garber in New York and Emma O’Brien in Wellington.

To contact the reporters on this story: Neil Denslow in London at ndenslow@bloomberg.net; Jeremy Herron in New York at jherron8@bloomberg.net To contact the editors responsible for this story: Jeff Sutherland at jsutherlan13@bloomberg.net; Emma O’Brien at eobrien6@bloomberg.net Jeremy Herron, Emma O’Brien