European stocks are set for their second consecutive session of gains Thursday as a stronger U.S. dollar holds down regional currencies and improving economic sentiment keeps global equity markets in the green.
Britain’s FTSE 100 is expected to open around 10 points higher at the start of trading, according to financial bookmakers IG, although slumping global crude prices will likely weigh on oil majors in the U.K. benchmark. A softer euro, however, which has fallen 1.5% against the greenback since hitting a January 2015 high earlier this week, will support European stocks at the opening bell, with Germany’s DAX performance index expected to gain around 0.2% and the CAC-40 in Paris poised fora 0.27% gain.
The greenback was the dominant influence in overnight trading in Asia, with the dollar index, which measures the currency’s strength against a basket of six global peers, rising 0.13% to 93.01, taking its two-day gains to just over 1.5% as investors price in faster rate hikes from the U.S. Federal Reserve after a stronger-than-expected reading of private sector hiring in August and an upward revision of second quarter GDP growth to 3% yesterday by the U.S. Commerce Department.
The move pushed the yen to a two-week low of 1.1054 against the dollar and helped take the Nikkei 225 benchmark 0.6% into the green as Tokyo eased to the close Thursday. The region’s broadest measure of share prices, the MSCI Asia ex-Japan index, was little changed at the start of European trading, although sentiment had been boosted by a solid reading for manufacturing and service sector activity in August from officials in China.