The rally in riskier assets like the euro and equities resumed on Wednesday on hopes a growing flood of money from major central banks will support growth as data showed the euro-zone's debt-laden economy headed for a recession.
A view that Greek political leaders and euro zone finance minister will find a way to secure a second bailout deal, and promises by Chinese leaders to keep investing in euro zone debt also supported the positive sentiment.
The euro was up 0.4% at $1.3172 U.S., retreating from a session high of $1.3191 and well off the February 9 peak of $1.3322 U.S.
Economic output in the 17-nation euro area fell a widely-expected 0.3% in the last three months of 2011 compared to the previous quarter, and is likely to contract further in the current quarter to mark its second recession in three years.
But the French economy posted a surprise expansion in the last quarter of 2011 and a slowdown in Europe's biggest economy, Germany, was not quite as bad as expected.
Since late December the European Central Bank has moved to supply banks with large amounts of cheap money, the U.S. Federal Reserve has committed to keeping rates low until 2014 and the Bank of Japan and the Bank of England have announced further policy easing to help the global economy recover.
The measures have underpinned demand for equities and helped lift the MSCI world equity index by over 9% for the year to date.
On Greece, a source told Reuters the leader of the conservative party expected to lead the next government will settle some nerves by giving a commitment on Wednesday demanded by euro-zone ministers as a condition of bailout payments.
Finance Minister Evangelos Venizelos said all outstanding issues would be resolved by the time of a conference call of ministers set for later on Wednesday.
The ministers are next due to meet on Monday, but Greece has said it must initiate a debt swap deal with private sector bondholders by Friday if it is to meet a March 20 for 14.5 billion euros in debt repayments.
Meanwhile, oil prices gained as supply concerns in the Middle East sparked by tensions over Iran and disruptions in South Sudan outweighed worries about progress on the Greek debt deal and the current weakness in the global economy.
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