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LONDON (Reuters) – World stocks rose on Tuesday on the back of upbeat Chinese data and optimism about coronavirus vaccines as a struggling dollar kept the hot streaks for the euro and some of the biggest emerging market currencies sizzling.
FILE PHOTO: U.S. Dollar and China Yuan notes are seen in this picture illustration June 2, 2017. REUTERS/Thomas White/Illustration
The euro’s fifth day of gains made for a slow morning in continental Europe but a solid 0.8% rise on London’s internationally- skewed FTSE maintained the overnight momentum from Asia and Wall Street.
The day’s eye-catching move was a 16-month high for the yuan[B9N2F802B] as 5.6% jump in Chinese industrial output in August and the first pick-up in retail sales since the coronavirus outbreak gave it its best day since July.
“Strong external demand, a further recovery from the pandemic and pent-up demand from the floods all contributed to the robust activity data in August,” Ting Lu, chief China economist at Nomura, said in a note to clients.
“We expect a further, albeit gradual, recovery of the services sector, a steady improvement in retail sales and elevated fixed-asset investment growth.”
With sentiment also boosted by hopes for a COVID-19 vaccine after British drugmaker AstraZeneca restarted its vaccine trial and the dollar extending recent losses, other currencies were also on the rise.
The euro was up 0.2% at $1.1891 after a surprise jump too in Germany’s ZEW sentiment survey, the Australian and Kiwi dollars both gained as did Britain’s pound as traders showed little reaction to the government winning the first parliamentary vote on its controversial new Brexit bill.[/FRX]
With the yuan leading the charge, MSCI’s EM FX index also climbed to a near 7-month high..
“It is better risk appetite and the softer dollar environment,” ING’s Chief EMEA FX and interest rate strategist, Petr Krpata, said,