A passenger wearing a face mask is seen at the main train station in Frankfurt, Germany, on Aug. 29, 2020.
Kevin Voigt/Zuma Press
The euro reached a two-year high on Tuesday and European stocks rose, as traders balanced growing signs the recovery is continuing with concerns governments are withdrawing aid.
The euro EURUSD, +0.26% traded as high as $1.1999 vs. $1.1936 on Monday, as the shared currency reached the strongest level since May 2018. The gains for the euro come amid the backdrop of an aggressive U.S. Federal Reserve, which last week said it would begin an average inflation targeting program, though it left implementation vague.
The U.K. FTSE 100 UKX, -1.10% fell 1.2% after a three-day break. The German DAX DAX, +0.68% and the French CAC 40 PX1, +0.13% each advanced, as did the Stoxx Europe 600 SXXP, +0.16%.
After a 223-point retreat for the Dow industrials DJIA, -0.78% on Monday, U.S. stock futures YM00, +0.06% pointed higher.
The German government upwardly revised its 2020 estimate of a contraction, now seeing a 5.8% fall versus the earlier projection for a 6.3% contraction in 2020. The final readings of the manufacturing purchasing managers index for August showed a second month of improving conditions, while consumer prices were negative.
U.S. Treasury Secretary Steven Mnuchin accused Democratic lawmakers of not wanting to negotiate in good faith, at a time when unemployed people in many U.S. states have lost federal unemployment benefits. The federal government is due to shut down on Oct. 1 in the absence of new funding agreements.
Reports over the weekend in the U.K. suggested the Treasury was looking to increase taxes to pay for coronavirus relief.
German commercial real estate company Aroundtown AT1, +3.55% rose, after saying it would buy back up to €1 billion of its own stock as it is in talks to sell over €1 billion of assets.
Old Mutual OMU, -5.65% slumped, as the Anglo-South African insurer reported a first-half loss and suspended its dividend.
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