ND: Euro Gains Against Dollar, European Stocks Fall Back Slightly
By Tommy Stubbington
The euro climbed against the dollar Wednesday, but it was unclear whether the rally will hold, given the currency markets' recent run of unpredictable moves.
Currencies have been especially jumpy since last week, when the U.S. Federal Reserve surprised investors by indicating it is in no rush to raise interest rates.
The euro has bounced back sharply against the buck in recent days amid some sharp swings. The single currency climbed 0.3% in European trade to $1.0951, well above its recent 12-year low of under $1.05.
But the failure to settle decisively above $1.10 shows investors are still nervous that further declines could be in store, according to Commerzbank strategist Esther Reichelt.
"Clearly euro-dollar investors now want to wait and see new data confirming that the positive momentum of the U.S. economy remains unaffected," she said.
The euro also gained against the yen and the British pound.
The rebound for the currency has come amid some improving economic data in the eurozone. Business activity expanded faster than expected in March, figures on Tuesday showed. Investors were awaiting German business confidence data later Wednesday.
Still, the impact of a stronger economy on the currency market is likely to be limited given the European Central Bank's massive bond-buying program is already in place, said strategists at BNP Paribas.
In equity markets, European stocks fell back slightly after Tuesday's gains. The Stoxx Europe 600 index was 0.4% lower.
A stronger euro is generally seen as negative for European companies, which get much of their revenue abroad.
Germany's DAX index lost 0.3%, while France's CAC 40 fell 0.6%. The U.K.'sFTSE 100 was flat.
U.S. stock futures indicated a 0.1% opening gain for the S&P 500. Changes in futures aren't necessarily reflected in market moves after the opening bell.
In commodities markets, Brent crude oil rose 0.6% to $55.42 a barrel. Gold was steady at $1,191.00 an ounce.
Write to Tommy Stubbington at tommy.stubbington@wsj.com
