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Euro jumps to two-year highs as shares take breath

Friday, July 21, 2017 - 01:40

The euro's surge to an almost two-year high dominates financial markets on Friday, with most major stock exchanges consolidating after a second strong week of gains which have seen record highs in Asia and tech stocks. David Pollard asks whether it's time for investors to cash in their gains.

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BROADCAST AND DIGITAL RESTRICTIONS**Broadcasters: NONE Digital: NONE**~ Seeing is believing. The euro's two year high at over 1 dollar 16 on Friday dominating European sentiment. While share markets took a breath after this week's heady gains. Not least of all US techs. Those passing another milestone on an upwards journey - the S&P 500 tech sector printing new all-time highs. Time perhaps for caution - though most analysts dismiss comparisons with the year 2000 ... When the great tech bubble burst. (SOUNDBITE) (English) JEREMY STRETCH, HEAD OF G10 FX STRATEGY, CIBC, SAYING: "If we are in a tightening global monetary policy environment and that easy liquidity which has really elevated equity markets to such extreme levels, if that scenario is reversing then it does suggest that investors have to be a little bit more judicious in terms of their stock picking." SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "We will see some sort of retracement. I think that's quite normal. I don't think anyone is expecting a crash and I don't see that happening." The single currency getting extra lift from hints of hawkisness at Thursday's ECB. The euro seen as having some way to go - especially against a dollar suffering its own domestic woes. (SOUNDBITE) (English) JEREMY STRETCH, HEAD OF G10 FX STRATEGY, CIBC, SAYING: "The lack of ability to push forward with health care reform does raise the question as to whether the Trump administration can push forward with the reflation trade which was really driving sentiment in the early part of the year." The next big focus: earnings season as it gets underway in Europe. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "I'm not expecting any surprises. Everything has gone to plan... The market doesn't seem to be expecting a shock. If we get one, I think that will be quite damaging." Most traders see a story of steady revenue growth. Anything else likely to make them look - and think - again.

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Euro jumps to two-year highs as shares take breath

Friday, July 21, 2017 - 01:40