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Euro, shares dip as action on Europe awaited

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The euro hit a one-week high, while shares and commodities rebounded yesterday as finance chiefs of advanced economies around the world prepared to hold emergency talks on the eurozone debt crisis.

Investors were also hoping the intensifying problems in Europe and disappointing Chinese and US data could prompt the European Central Bank and the Federal Reserve to announce some stimulus measures to help their economies.

The euro rose as high as $1,25429, its highest in a week, extending its rebound from a two-year low of $1,2288 reached last Friday, though there remains plenty of concern about the likelihood of co-ordinated government or central bank action.

“The respite looks temporary unless followed by concrete measures out of the eurozone to stem the crisis,” said Mitul Kotecha, head of Global FX Strategy at Credit Agricole CIB.

News of the talks between the Finance ministers of the Group of Seven leading industrialised powers earlier lifted MSCI’s broadest index of Asia-Pacific shares outside Japan MIAPJ0000PUS by 1,2%, snapping a four-day losing streak. The MSCI world equity index MIWD00000PUS was up 0,2% at 292,01.

The eurozone’s blue-chip Euro STOXX 50 TOXX50E index opened 0,6% higher at 2 091,14 points, extending its 0,5% gain on Monday, but in muted volumes as UK markets remain closed for a holiday.

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