Cautious Fed sends stocks to record highs, dollar dips

Global stocks scaled record highs on Friday, capping their best week in over two months as the dollar stayed close to nine-month lows, with bets on a gradual U.S. Federal Reserve rate hike path and hopes for a strong earnings season boosting risk appetite.

After a scare at the end of last month, when stock markets skidded on the view that the era of easy money might be coming to an end across the globe, investors have been soothed by a run of more dovish comments from central bankers. 

Dallas Fed President Robert Kaplan on Thursday advocated a go-slow approach to further tightening after two hikes so far this year, saying he first wants to see more evidence that inflation is heading back up to the Fed's 2-percent goal. 

Fed Chair Janet Yellen also said on Thursday that the central bank's further rate hikes could be gradual, given persistently low inflation despite an improving economy. 

European shares were poised for their best week since late April as investors piled back into equities, though moves on indexes on Friday were muted as investors hunkered down ahead of earnings reports from major U.S. banks including JPMorgan (JPM.N) and Citigroup (C.N) later in the day. 

The pan-European STOXX 600 index inched up 0.1 percent, adding to earlier gains on stock markets in Asia that took MSCI's world stock index .WORLD to an all-time high