(RTTNews) - During European deals on Tuesday, the euro recovered its previous session's losses against most major currencies as European stocks rose despite news of the Italian debt downgrade.
Standard & Poor's downgraded Italy's sovereign debt rating by one notch to A/A-1, citing the nation's weakening prospects for economic growth.
S&P's maintained its "negative" outlook on Italy and said that the measures included in and the implementation time line of Italy's National Reform Plan will likely do little to boost Italy's economic performance, particularly against the backdrop of tightening financial conditions and the government's fiscal austerity program.
Meanwhile, fears of a Greek default eased after Greece described a conference call between Finance Minister Evangelos Venizelos and officials from the European Commission, the International Monetary Fund and the European Central Bank as "productive and substantive." Greece said that the conference call, during which the officials discussed further measures the country must take to receive additional aid, would resume on Tuesday.]
Talks between Greece and its three creditors are aimed at assessing the progress made by Greece in meeting the financial targets set by the three in exchange for a bailout package Athens had availed last year to avoid defaulting on its debts. The outcome of the talks would decide whether Greece gets an 8 billion euro ($11 billion) tranche of the rescue loan slated for October.
Germany's DAX is now up by 2.2 percent, France's' CAC 40 index is gaining 1.5 percent and the U.K.'s FTSE 100 index is adding 1.4 percent.
The euro is currently trading at 1.3715 against the dollar and 104.90 against the yen, compared to Asian session lows of 1.3595 and 104.01, respectively.
Against the pound, the euro is presently worth 0.8730, up from 0.8680 hit at 2:10 am ET.
The survey results from Mannheim-based ZEW Centre for European Economic Research showed today that Germany's economic sentiment deteriorated for the seventh month in a row in September.
The index of economic sentiment fell by 5.7 points to -43.3 points. Economists were expecting the indicator to drop to -45.
Traders now focus on the New York session, in which the U.S. housing starts and building permits for August, Canada's wholesale sales for July and leading indicators for August are due for release.
