Footsie fights as euro beats dollar

12 April 2012

LONDON shares bounced off yesterday's five-and-a-half-year lows in early trading, driven higher by a late rally on Wall Street last night.

The FTSE 100 index jumped 65.8 points to 4060.3 in the first hour of trading, although dealers said the reprieve was likely to prove short-lived amid continuing worries about the global economic recovery and corporate accounting irregularities.

'It's premature to call any major bottom,' said Steve Hatton, analyst at online brokerage deal4free.com.

'Yesterday was more of a corrective move [on Wall Street] than a turnaround. The overall risk is still to the downside.'

New York's Dow Jones Industrial Average closed down just 0.5% at 8639.19 after plunging more than 5% at one stage. The City was hoping for a lifeline from US Federal Reserve chairman Alan Greenspan, who delivers a key congressional testimony on the state of America's economy today. He is expected to reaffirm that the fundamentals of the US economy remain sound.

The brighter share mood failed to lift the dollar, which slumped to fresh two-year lows against sterling of 1.5710. The euro pulled further away from dollar parity, surging to a high of 1.0088 before retreating to 1.0050.

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