London--European stocks diverged Thursday as the euro hit a nine-week dollar peak on weak US data that dimmed the chances of a Federal Reserve interest rate hike in early summer.
Markets had fallen sharply the previous day on news that the world's biggest economy grew by just 0.2 percent in the first quarter, well below the one percent rate anticipated by analysts.
In early afternoon deals, London's benchmark FTSE 100 fell 0.02 percent to 6,944.90 points, as investors also digested a barrage of earnings before next week's general election.
Frankfurt's DAX 30 index added 0.37 percent to 11,475 points and the CAC 40 in Paris dipped 0.12 percent to stand at 5,033.30 compared with Wednesday's close.
The European single currency jumped as high as $1.1249.
"The world's most heavily-traded FX pair has been surging higher in the recent days mainly because of weakness in US data; correspondingly, European equities have been moving south," said analyst Fawad Razaqzada at trading site Forex.com.
"Of course, the slowing pace of growth in the world's largest economy matters for the stock market too because it is one of the main export destinations for most of the major European companies.
"A weaker euro is obviously good news for European exports. But now that it is rising, stock market speculators are paring back their bullish bets accordingly."
The euro later stood at $1.1165, up from $1.1128 late in New York on Wednesday.
"The dollar has weakened severely against the pound and the euro. This is down to the markets pushing back the expectations of a US rate rise," noted CurrenciesDirect analyst Phil McHugh.
AFP
