By Patrick Graham
LONDON (Reuters) - The U.S. dollar recovered ground on Wednesday after its worst day in more than a year, while a retreat in oil prices after four days of gains knocked back European stock markets.
With another move by Chinese authorities to stimulate the economy underlining concern over growth there, Wall Street also looked set to open down
Globally, investors' appetite for risk appears much stronger than it was a week ago. Oil has bounced almost 20 percent in value inside a week, stock markets are back on the rise and the euro is up almost 4 cents from low against the dollar.
But for the dollar that may simply add up to a clearing of the decks before another push higher, while a heady brew of concerns over politics, growth and monetary policy has left stock markets struggling for clear direction.
In Europe much attention is focused on Greece, where shares recovered to trade 1.8 percent higher after a handful of assurances and signals from Greek and European leaders.
"Sentiment is proving oh so fickle on little news, a warning of illiquid and volatile markets later in 2015," analysts from French bank Societe Generale said in a morning note to clients.
"We need to be clear in Greece, before talking debt relief, that the new government is intent on reform. Today's press on Greece has now turned less positive than earlier this week."
The dollar was 0.3 percent higher on the day against a basket of currencies. <.DXY>
"The dollar bid bias remains in place. If we continue to see good jobs data as well as earnings improve in the United States in the coming days, that could bring the shine back," said Jeremy Stretch, head of currency strategy at CIBC World Markets.
Much will depend on whether oil can sustain its recent rally, thus helping to underpin energy stocks and lessening fears of global deflation.
Brent crude prices
Overall in Europe, stock markets were a touch higher <.FTEU3> but Germany's main DAX index and London's FTSE 100 both posted losses. <.GDAXI> <.FTSE>
U.S. futures pointed to a fall of 0.1-0.3 percent at open.
In Asia the Nikkei <.N225> closed 2 percent higher as banks outperformed on strong earnings from Mitsubishi UFJ Financial Group <8306.T>.
Shares in Shanghai <.SSEC> had closed 0.9 percent lower ahead of the announcement by China's central bank of a cut in the amount of cash that banks must hold as reserves. That was the first industry-wide cut in more than 2-1/2 years, as it increased efforts to shore up flagging growth in the world's second-largest economy.
(Editing by Toby Chopra)
