Currency markets were little changed yesterday or 'mixed' in terms of signalling greater risk aversion or not.

Thus, what is perhaps one of the best 'weathervanes' for levels of risk appetite, the US dollar- Japanese yen currency pair, only fell by 0.14% to the 93.29 yen level, a non-consequential move.

The single currency moved more in its own cross versus the dollar but, similarly, broke no new ground as far as levels of technical support and resistance are concerned.

"EUR/USD continues to inch slowly higher, we view this as the market absorbing recent losses. (...) However at this stage we consider that while rallies are contained by the accelerated downtrend at 1.3221, the market will remain directly offered," analysts at Commerzbank wrote this morning.

All of the above came against the backdrop of less fiscal austerity in China and Europe.

Thus, Beijing yesterday indicated that it will increase its deficit spending to -2.0% of gross domestic product from -1.5% last year, in a bid to meet its goals for economic growth this year.

Meantime, and in Europe, following last night´s meeting of European Union finance ministers the bloc´s Economics Affairs Commissioner, Olli Rehn, signalled that several countries may be given more time to meet their budget deficit reduction goals.

As well, countries such as Ireland and Portugal may be granted greater breathing room in order to return the funds which they borrowed from international creditors - at the height of the financial crisis - to prop up their economies.

In short, Europe seems headed towards a degree of fiscal stimulus or, perhaps more correctly, less fiscal austerity.

The Eurozone service sector purchasing managers´ index for the month of February recovered to the 47.9 point level after a reading of 47.3 for the month before (Consensus: 47.3).

All of the national gauges either beat or met economists´ expectations, save for Spain, where activity weakened in that sector last month.

AB

Related share prices