The bull case for Europe world news 2011

The bull case for Europe world news 2011

While it may take a big longer time than markets want, people underestimate Europe’s willingness to keep itself together, said Neil Dwane, chief investment officer overseeing European portfolio management for RCM, which manages $154 billion.

/quotes/zigman/4867933/sampled EURUSD 1.3781, -0.0095, -0.6872%

Euro far above recent lows

The euro’s collapse has been greatly exaggerated, he said, noting it fell as low as $1.19 last year when Greece's debt problems first came of light.

Though it’s down to $1.37 from its highs around $1.60, “the euro looks pretty sound from where I’m standing.”

Dwane said something like eurobonds are still possible along with more concrete steps by countries to rein in their debts. The euro could fall to closer to $1.20.

The dollar was a little softer in morning trading after a report on U.S. consumer sentiment.

A gauge of consumer sentiment rose to 57.8 in the preliminary reading for September after tumbling to a nearly three-year low 55.7 in August, according to Friday reports on the gauge from Thomson Reuters/University of Michigan. Economists polled by MarketWatch had expected a slight rise to 57.3. The bigger-than-expected rise dulled some investor interest in the dollar. See more on consumer sentiment.

The change in consumer sentiment only reversed a “small part” of last month’s plunge, said Paul Dales, senior U.S. economist at Capital Economics: “The rise from last month’s near-record low was presumably driven by the stabilization in equity prices and a fading of fears that the U.S. economy was about to drop off a cliff, but confidence remains well below the 74.3 seen in May.”

The 17-nation shared currency jumped Thursday after the European Central Bank, in coordination with other major central banks, announced it would provide additional dollars to banks to help them meet liquidity needs through the end of the year. Read more on ECB loans to European banks.

The action helped calm fears of an imminent dollar-funding crunch as banks grow wary of lending to each other amid fears over exposure to Greece’s sovereign debt.

Among other major currencies, the British pound /quotes/zigman/4867886/sampled GBPUSD -0.0556%  bought $1.5801, little changed from $1.5808 on Thursday.

Against the Japanese yen, the dollar /quotes/zigman/4868099/sampled USDJPY +0.2445%  traded at ¥76.93, up from ¥76.67.