European Stocks Surge, Euro Slides Lower vs Dollar

By Josie Cox 

        The euro slid against the U.S. dollar and European stocks surged Tuesday after comments by two European Central Bank board members.
        In early trade, the euro was down more than 1% against the buck at just over $1.119 after the European Central Bank published comments delivered by one of its board members stating that the a recent reversal in bond prices was worrisome for the speed at which it happened.
        Benoit Coeure also said that the central bank would moderately front-load its purchases in its bond-buying program because of less market liquidity in the summer and that this move wasn't due to market conditions.
        Separately, ECB board member Christian Noyer said the ECB was ready to go further if needed to meet its inflation target.
        The dollar had already strengthened against the euro late Monday after European markets closed when economists at the Federal Reserve Bank of San Francisco published a paper in which they argued that issues with seasonal adjustments in the official growth statistics had depressed winter figures, and that first quarter GDP was actually much higher than initially estimated.
        The dollar also rose against Japan's yen. Additionally, the greenback was spurred by a jump in U.S. Treasury yields.
        Strategists at BNP Paribas wrote in a note that they are still bullish on the dollar. Last week the euro gained around 2.5% against it, and the strategists said that this may have brought it back down to level where it looks attractive to buy.
        Early Tuesday, the Stoxx Europe 600 rose 1.5%, with Germany's DAX--packed full of major exporters that benefit from a weak euro--leading the pack for a second consecutive day with a 1.7% rally.
        France's CAC and London's FTSE 100 added 1.7% and 0.5% respectively.
        On Monday, the S&P 500 index rose to its third straight record close and the Dow industrials rose to their first record in more than two months, albeit in relatively thin trade.
        The Nasdaq Composite Index added 0.6%, still 0.3% shy of its last record reached on April 24.
        Write to Josie Cox at josie.cox@wsj.com
        (END) Dow Jones Newswires

        May 19, 2015 03:55 ET (07:55 GMT)

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