Reassuring results from leading investment banks and a dramatic slide in oil prices helped fuel a strong recovery in investor risk appetite this week, driving US and European equity markets higher and helping the dollar rally off a record low against the euro.

The week began on an inauspicious note as the US government’s rescue plan for mortgage agencies Fannie Mae and Freddie Mac failed to alleviate concerns about the wider financial sector – particularly after the failure of regional US bank IndyMac.