Further raid on BoC possible

The euro and European shares firmed on Wednesday as investors waited to see whether fresh economic data will confirm a fragile economic recovery in the euro zone is underway but concerns about the latest Greek bailout deal weighed.

The euro area and German Purchasing Manager's Indexes (PMIs), due out at 0858 GMT, are expected to confirm the modest expansion seen in the January data, suggesting the debt-stricken region should avoid falling into a technical recession.

Asian shares eked out modest gains earlier after China's manufacturing PMI rose to a four-month high in February although it remained in contraction territory. The FTSEurofirst index of top European companies opened up just 0.1 percent at 1,079.13 points on Wednesday.

Improved risk appetite on the back of the Greek deal has quickly given way to fresh doubts over whether the country will make the agreed budget cuts and whether the plan is enough to make its debt sustainable.

The euro was up 0.14 percent to $1.3258 after pulling back from near two-week highs of $1.3293 on Tuesday, and it hit a 3-month high versus a broadly weaker yen.

The Japanese currency has weakened to be above 80 yen to the dollar for the first time since July 2011 as rising oil prices and an easier monetary policy stance by the Bank of Japan hit demand.

Source: Financial Mirror

Published on 22 February, 2012

|||German euro zone PMI eyed

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