The euro and global stock markets surged higher on Thursday, bolstered by China's knock-down of a report saying it was looking to cut its holdings of euro zone sovereign debt.
The People's Bank of China's assertion that Europe is a key investment market for its foreign exchange reserves helped lift the euro from near four year lows. The central bank called the Financial Times report on Wednesday groundless.
"The fact that they came out with a statement today suggesting they're not going to sell the euro doesn't mean that they're not concerned. But they're looking at the euro from a long-term perspective and the base-case scenario is that the euro zone is not going to crack," said David Watt, senior currency strategist, at RBC Capital Markets in Toronto.
