July 20, 2011
The euro gained on Wednesday on guarded optimism an accord would be reached to avert a Greek default, reducing the appeal of low-risk U.S. and German government debt.
World stocks, with the exception of Wall Street, rallied on strong earnings and expectations European officials could achieve a viable financial rescue for Greece at a summit in Brussels on Thursday.
Doubts persisted whether a second round of aid worth 110 billion euros for highly indebted Greece would be enough to stop the region's crisis spreading to Italy and Spain, the euro zone's third- and fourth-largest economies.
"We expect a new framework for Greece to be agreed, involving the first real efforts to reduce Greece's debt burden. But we expect little concrete in terms of measures to reduce contagion more broadly," said Jens Nordvig, global head of G10 FX strategy at Nomura in New York.
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