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Europe Markets: Euro at two-year high vs. the dollar as European stocks and U.S. futures gain

Europe Markets

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

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

fell 1.2% after a three-day break. The German DAX

and the French CAC 40

each advanced, as did the Stoxx Europe 600

After a 223-point retreat for the Dow industrials

on Monday, U.S. stock futures

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

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

slumped, as the Anglo-South African insurer reported a first-half loss and suspended its dividend.



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