Dollar off lows, shares up on promising earnings, data

Tue Jul 30, 2013 7:54am EDT
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By Marc Jones

LONDON (Reuters) - The dollar eased off a five-week low and shares inched up on Tuesday as a heavy session of European data and earnings supported growth prospects heading into this week's three big central bank meetings.

A pick-up in euro zone consumer and business confidence gave stock markets a boost as they await policy clues from the U.S. Federal Reserve, ECB and Bank of England this week.

It was also one of the busiest days of the European earnings season so far with over 40 of the region's major companies announcing results. .EU

Strong showings from French utility EDF and German chip-maker Infineon helped lift European shares .FTEU3 though disappointments from oil major BP and UK bank Barclays trimmed the gains to leave MSCI's world index .MIWO00000PUS up 0.1 percent by 1100 GMT.

Economic morale in the euro zone reached a 15-month high in July, surveys showed, underpinning Europe's chances of a gradual exit from nearly three years of economic downturn, while Spanish data showed the economy closer to emerging from its slump.

However, many investors were happier to stay on the sidelines, awaiting the outcome of the Fed's two-day meeting on Wednesday, and those of the ECB and Bank of England on Thursday.

The dollar .DXY continued to edge away from Monday's five-week low as investors viewed its sharp drop over the last two weeks as a chance to get back in ahead of the Fed meeting and this week's growth and jobs data.

"Personally I think the Fed is not going to want to rock the boat, but what could change market expectations is the U.S. data that is coming out," said Alvin Tan, FX strategist at Societe Generale.   Continued...

A trader works on the floor of the New York Stock Exchange, July 29, 2013. REUTERS/Shannon Stapleton