(AFP) – Mar 7, 2011
LONDON — The euro rose Monday but European stocks were mixed as dealers brushed aside a credit downgrade for Greece and mulled the outlook for the US economy as oil prices struck 2.5-year highs.
The single currency rose to $1.4027 in morning London trade from $1.3979 in New York late Friday as the euro continued to win support from the prospect of a rise in eurozone interest rates.
On the stock markets, London's FTSE 100 gained 0.36 percent to 6,011.80 points while Frankfurt's DAX 30 fell 0.15 percent to 7,168.36 points and in Paris the CAC 40 dropped 0.28 percent to 4,009.09 points.
"In Europe there is speculation EU leaders may have difficulties agreeing on measures to counter the region's sovereign-debt crisis," ETX Capital trader Anita Paluch said, noting weakness in some markets.
Moody's Investors Service on Monday slashed its Greek credit ratings by three notches from Ba1 to B1 and warned that they could be downgraded further given the risks to the country's stabilisation efforts.
Moody's said the downgrade reflected its concerns over Greek efforts to balance its strained public finances after Athens had to seek a bailout from the European Union and International Monetary Fund last year to avoid default.
Eurozone leaders meet later this week in Brussels to discuss plans for a permanent European Stability Mechanism to replace the 3-year European Financial Stability Fund which was set up after Greece nearly defaulted in May.
Meanwhile in Asia on Monday, Japanese shares tumbled, with sentiment hit by spiking oil prices amid fears of continued unrest in North Africa and the Middle East, with automakers suffering particularly, dealers said.
Adding to the downbeat mood was domestic political turmoil following the resignation of foreign minister Seiji Maehara as he took responsibility for accepting illegal donations from a foreign resident.
Tokyo fell 1.76 percent as a result.
In oil trading, New York's main contract, light sweet crude for delivery in April, hit $106.45 a barrel -- the highest level since September 2008.
It later stood at $106.10, up $1.68 compared with Friday's close.
In London, Brent North Sea crude for April climbed $1.02 to $116.99.
Elsewhere, gold rose to a fresh record $1,442 an ounce as the precious metal won support from its status as a safe haven investment. It also benefited from a weaker dollar, which fell to 82.07 yen from 82.26 yen on Friday.
Wall Street stocks fell on Friday as high oil prices trumped positive US jobs data showing a surge in new jobs in February -- 192,000 in total -- and a drop in the unemployment rate to below nine percent for the first time in almost two years.
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