(Reuters) European shares traded lower on Friday despite strong eurozone factory data, after a delay to a keenly awaited US tax reform bill dented Asian trading and curbed appetite for the dollar.
Eurozone shares, which started to accelerate losses about half an hour before the release of the data, briefly touched a session low before stabilising down about 0.9%.
A purchasing managers’ index showed that eurozone factories had their busiest month for over 17 years in November, even though they raised prices at the fastest rate in more than six years.
Forward-looking indicators suggested the momentum would continue to the end of 2017, capping what is expected to be the best year for euro zone economic growth in a decade.
“We have a two-faced market. Wall Street continues to run on hopes of fiscal reform while in Europe, the renewed strength of the euro is hurting the DAX which in turn is dragging all the other bourses to the downside,” said Carlo Alberto De Casa, Chief Market Analyst at ActivTrades.
The single currency eased slightly from the day’s highs of $1.1940 to trade at $1.1920. It was still up 0.2% on the day.
The gap between German 10-year and 30-year borrowing costs was at its tightest level since late August as a worse-than-expected eurozone inflation number on Thursday pushed back prospects for monetary policy tightening well into the future.