LONDON, Jan 30 - Investors pushed European stocks and the dollar higher on Friday ahead of U.S. data expected to show robust growth in the world's largest economy. Euro zone government bonds, hammered on Thursday after the U.S. Federal Reserve signalled it could be closer than earlier thought to raising interest rates, recovered somewhat. Crude oil prices firmed after five days of losses. The dollar hit a one-week high against the euro following its rally on Thursday after the Fed dropped its pledge to keep rates on hold for a "considerable period", saying instead it "can be patient" about tightening policy. The greenback was last at $1.2395 to the euro after rallying as far as $1.2349. The dollar's recovery was seen as a relief for euro zone policymakers who have expressed concern before next week's meeting of Group of Seven finance ministers about the euro's rapid rise. "Now that the Fed is seen more hawkish, stronger than expected data could lead the market to test the year low for the euro," said Shahab Jalinoos, senior currency strategist at ABN AMRO. But the G7 meeting next week might affect this outlook.
The fourth quarter U.S. gross domestic product data, due at 1330 GMT, and a Chicago region manufacturing survey could further fuel rate hike expectations and push the dollar higher. GDP is expected to show annualised growth of 4.8 percent, according to a poll, compared with a blistering 8.2 percent in the third quarter. The Chicago purchasing management index is expected to have risen to 62 in January from 59.2 in December. European shares rose, boosted by positive U.S. earnings figures and higher economic growth. "People are thinking the recovery is powerful and here to stay," said Akber Khan of Deutsche Bank European Equities. "They...have realised that they knew U.S. interest rates would rise anyway and are again pricing in growth." Shares were also lifted by Swiss staffing group Adecco , which said its accounting problems were limited and that its results and finances would not suffer. The FTSE Eurotop 300 index of pan-European blue chips <.FTEU3> was up 0.25 percent while the narrower DJ Euro STOXX 50 index <.STOXX50E> was 0.35 percent higher. U.S. blue chips rose on Thursday but investors sold off technology stocks. The Dow Jones Industrial average <.DJI> closed up 0.4 percent but the tech-heavy Nasdaq <.IXIC> lost 0.44 percent.
U.S. stock index futures were up slightly in Europe, indicating Wall Street would open higher later. Japanese stocks ended all but flat as investors took profits on shares that have risen in expectation of strong earnings. The Nikkei index <.N225> closed up 0.04 percent and the broader TOPIX index <.TOPX> slipped 0.25 percent. Euro zone government bond yields, which move inversely to prices, fell after hitting three-week highs on Thursday on the Fed statement and on upbeat comments on economic prospects from the European Central Bank. The interest rate-sensitive two-year German Schatz was yielding 2.53 percent, down 2.2 basis points. The yield on the benchmark German 10-year Bund was at 4.24 percent, down 2.8 basis points. Crude oil recovered after five days of losses during which speculators unwound long positions built up over the winter. March Brent was up 23 cents a barrel at $29.36 and U.S. light crude was 29 cents higher at $33.10.//