Euro, Shares Gain on German Data, Greece Deal Hopes

Euro was seen touching 3 weeks high Friday, on indications of improvement in negotiations about getting fresh aid toGreece. Another factor affecting the same was a survey from Germany, which was pretty influential in its way and talked about improvement in business sentiment. Euro gained 0.2% to reach $1.2906, maintaining its gain against dollar for second week straight.

There was a rather muted reaction on the equity markets, with pan-European FTSEurofirst 300 index (FTEU3) being steady at close to 1,105 points; however, it was pretty much on right path for the best week seen in last ten months. Stock index futures of U.S. pointed towards modest gains after Wall Street opens up for a small trading day after Thanksgiving, with the focus being on the retail sector as the season of holiday shopping begins.

Optimism surrounding a deal that could aid Greece, hopes that U.S. lawmakers can arrive on an agreeable deal to avert fiscal crisis, and a German data indicating improvement in worldwide economic outlook strengthened and encouraged the asset markets this week. The world equity index of MSCI (MIWD00000PUS) increased 0.15% on Friday reaching 326.75 points, for a profit of around 3% since Monday. This would be its most outstanding weekly performance since the month of September.

Earlier, the broadest index of MSCI of Asia Pacific shares that are outside Japan (MIAPK0000PUS) increased 0.7% for weekly profit of around 2.6%, also its most outstanding week in last two months. With the year end approaching, analysts feel the gain is quite likely to continue.

Gerhard Schwarz, equity strategy head from Baader Bank said that Dec and Jan have always been good months in terms of seasonal gains so we shouldn’t be surprised to see better equities development in next few weeks. FTSEurofirst 300 index ofEuropeincreased in Dec for twelve of last fifteen years.

The new survey coming from German firms by Ifo think-tank of Munich has greatly infused moral boost in economic optimism. The Ifo think-tank found out that the companies were getting more upbeat regarding the outlook even though the euro crisis still very much persists. Klaus Wohlrabe, one of the economists at Ifo said that export expectations increased very strongly coming back in positive territory now and demand and orders situation are very much stabilizing. He explained that exports to Asia andUnited Statesare going good too.