The dollar took a
breather on Thursday after hitting its highest level against the yen
since 2002, and stocks stuttered as high-flying Chinese shares tumbled
and European officials downplayed talk of an imminent deal to keep
Greece afloat.
Commodity
markets rebounded as the dollar's momentum waned and though the euro
clung to hopes of an agreement on Greece, the bloc's shares and
lower-rated government bonds all lost ground.
A Greek government official had sparked speculation late on Wednesday that a deal had been drawn up. But a string of immediate denials by top European officials was followed by one from IMF chief Christine Lagarde as G7 leaders met in Germany.
"We are all in the process of working towards a solution for Greece, and I would not say that we already have reached substantial results," she said in a German TV interview.
"Things have moved, but there is still a lot of work to do," she said, adding that she believed Greece would fulfill its commitments.
Britain's FTSE .FTSE, Germany's DAX GDAXI and France's CAC 40 .FCHI were down 0.2, 0.4 and 0.5 percent respectively in early trading, Greek stocks .ATG dropped 0.7 percent, while yields on Italian, Spanish and Portuguese government bonds all rose.
But the euro was up for a second day, adding 0.3 percent against the dollar at $1.0935 EUR= [FRX/] after positive signs from Spain, where the economy grew at its fastest quarterly pace in over seven years in the first quarter as consumer spending recovered.
"There is a little bit of better sentiment towards Greece after we saw some reports yesterday of a deal," said Manuel Oliveri, an FX market strategist at Credit Agricole in London. "Even if there is no confirmation, it shows to the market that some progress is being made."
A Greek government official had sparked speculation late on Wednesday that a deal had been drawn up. But a string of immediate denials by top European officials was followed by one from IMF chief Christine Lagarde as G7 leaders met in Germany.
"We are all in the process of working towards a solution for Greece, and I would not say that we already have reached substantial results," she said in a German TV interview.
"Things have moved, but there is still a lot of work to do," she said, adding that she believed Greece would fulfill its commitments.
Britain's FTSE .FTSE, Germany's DAX GDAXI and France's CAC 40 .FCHI were down 0.2, 0.4 and 0.5 percent respectively in early trading, Greek stocks .ATG dropped 0.7 percent, while yields on Italian, Spanish and Portuguese government bonds all rose.
But the euro was up for a second day, adding 0.3 percent against the dollar at $1.0935 EUR= [FRX/] after positive signs from Spain, where the economy grew at its fastest quarterly pace in over seven years in the first quarter as consumer spending recovered.
"There is a little bit of better sentiment towards Greece after we saw some reports yesterday of a deal," said Manuel Oliveri, an FX market strategist at Credit Agricole in London. "Even if there is no confirmation, it shows to the market that some progress is being made."
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