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 With less nervy markets refocusing on the diverging outlooks
between the United States, where an interest rate rise is expected
next month, and a euro zone set for still looser monetary policy,
the euro fell to a seven-month trough against a broadly stronger
dollar.
Oil prices dipped after early gains, as the spotlight returned to a
global oversupply in crude and petroleum products, with gains made
after the Paris attacks and subsequent French air strikes in Syria
fading. <O/R>
Having hit a six-week high on Monday, the widely tracked CBOE
volatility index, or "fear gauge", fell almost 10 percent.
European shares were also helped by encouraging updates from
companies such as the world's second-biggest recruitment company
Randstad and Germany's United Internet.[.EU]
The FTSEurofirst 300 index was up 1.8 percent at 1,486.45 points by
0901 GMT after closing 0.2 percent higher in the previous session.
French shares were up 1.7 percent, after falling 0.1 percent on
Monday following the attacks that killed more than 120 people.
"European equity markets are catching the tailwind from the U.S.
after a strong close yesterday," said B Capital Wealth Management
Managing Director Lorne Baring.
"Investors are showing resilience to the recent attacks in Paris
despite mounting worries over security in Europe."
Investors are also eyeing the latest German ZEW economic sentiment
report due at 1000 GMT.
COPPER PLUNGES
Copper prices plunged to a fresh six-year low below $4,600 per tonne
on Tuesday as technical dealings in Shanghai and worries about
demand from China, the world's top consumer, triggered another round
of selling in London. [MET]
The dollar's appreciation has also buffeted industrial metals as a
stronger U.S. currency makes greenback-denominated commodities more
expensive for buyers.
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The euro dipped to $1.0656, its weakest since mid-April. Gains
against the single currency helped the dollar also reach its highest
in seven months against a basket of major currencies.
"Even though investors sold the euro (in the wake of the Paris
attacks), the decline could have been a lot steeper," wrote Kathy
Lien, managing director of FX Strategy for BK Asset Management.
MSCI's broadest index of Asia-Pacific shares outside Japan earlier
rose 1.7 percent, taking its cue from a surge on Wall Street and
bouncing from a six-week low struck the previous day on risk
aversion.
Shanghai stocks climbed 1.4 percent, while Japan's Nikkei added 1.6
percent, brushing a three-month peak.
The yen, which usually moves in the opposite direction to Japanese
shares and which tends to be sought in times of geopolitical
tension, edged towards a three-month low against the dollar. That
followed data on Monday that showed Japan, the world's third-biggest
economy, relapsing into recession.
Greek bond yields hit their lowest in more than a year and banking
stocks rose about 10 percent on Tuesday after the country's finance
minister said Athens had reached an agreement with its lenders on
financial reforms. [GVD/EUR]
Internationally traded Brent crude futures LCOc1 rose towards $44.80
before dropping back to $44.59 a barrel.
(Additional reporting by Atul Prakash and Marius Zaharia in London,
and Shinichi Saoshiro in Tokyo; Editing by Catherine Evans)
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