Europe close: Weaker euro proves boon for region´s stocks

European stocks pushed higher on Tuesday, with a weaker euro lending a helping hand to exporters as investors continued to mull over Federal Reserve Chair Janet Yellen’s speech at Jackson Hole at the end of last week.

The benchmark Stoxx Europe 600 index finished 0.45% higher, Germany’s DAX gained 1.07% higher and France’s CAC 40 was up 0.75%.

West Texas Intermediate closed with losses of 1.03% at $46.49 and Brent crude down 1.7% to $48.43.

Meanwhile, the euro slipped against the dollar, which gained ground amid rising expectations that the Federal Reserve might hike interest rates as early as September following Chair Janet Yellen’s speech at Jackson Hole last Friday. Yellen noted that the US economy is improving and suggested the case for a move on rates had strengthened in recent months.

A weaker euro benefits European exporters, as it makes their goods cheaper for holders of other currencies.

IG’s Joshua Mahony said: “Dollar strength has been a common theme since Friday, with the dollar index rising over 1.6% since Friday’s low of 94.17.”

Markus Huber, a trader at City of London Markets, said “Fed chief Yellen made it very clear during her speech in Jackson Hole last week that the timing of the next rate hike will very much depend on the strength of the economic data in the coming weeks. Consequently should employment figures turn out very strong again this Friday the likelihood of an interest rate increase as early as September will go up markedly.”

In corporate news, BHP Billiton dropped after a review conducted by a panel of experts concluded that the Samarco dam disaster at a mine part-owned by the company in Brazil last year was caused by construction and design flaws. The, report commissioned by BHP, said problems at the dam made it more unstable, causing “liquefaction” in the dam wall.

Distribution and outsourcing group Bunzl rallied after it reported a rise in first-half profit as revenue grew and the company lifted its interim dividend. Also on Tuesday, Bunzl announced that it has completed two further acquisitions in Canada and has entered into an agreement to acquire a business in Hungary.

Elsewhere, Germany’s Wirecard racked up strong gains after Barclays upgraded the stock to ‘overweight’ from ‘equalweight’.