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Euro up against the dollar and sterling

Euro up against the dollar and sterling

European shares and the euro led a fresh push by risk assets on Tuesday, with investors buoyed by the latest batch of U.S. data and earnings and hopeful a meeting of European leaders later in the week can advance plans to tackle Spain and Greece’s debts.

European shares on the FTSE Eurofirst 300 index rose 0.5 percent to 1104 as trading resumed across the region, with London’s FTSE 100 and Frankfurt’s DAX all in positive territory with the release of series of data from US, China and Euro zone nations. The drop in Chinese inflation fuelled hopes of further policy easing measures. Inflation in China slowed in September led by a notable fall in food inflation, the latest figures revealed from the National Bureau of Statistics giving ample room for policymakers to ease policy if the economy shows further weakness, reflecting tepid domestic, as well as external demand.

Optimism that Spain is getting closer to seeking a bailout also boosted sentiment, as well as the better than expected retail sales report from the United States. Greek Prime Minister Antonis Samaras has said that his government expects to successfully conclude talks with the country’s international creditors in time for the EU summit. In an interview to a Greek newspaper he admitted that there are differences between the creditors on how to cut the debt mountain. However, Samaras said he is confident that the troika will resolve the disagreements in time for the summit that starts October 18.

In the UK the inflation figure falls; UK CPI index fell from 2.5 per cent in August, while the retail prices index fell from 2.9 per cent in August to 2.6 per cent in September, according to the Office for National Statistics. The inflation figure has dropped to its lowest level for nearly three years in September, but there are fears the respite may only be brief as energy bills start to rise.

On the FX market GBPEUR trading at 1.2371 – 1.2410 and EUR USD trading at 1.2954 – 1.3015

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