European shares sink again, dollar holds strong

Doubts about the health of Europe's economy dominated trade on its major stock markrts on Thursday after a cautious message from the US Federal Reserve did little to stem the dollar's charge to 10-month highs. A steady rise for the US currency is the central story for global financial markets so far this month and a jump in US economic growth reported on Wednesday extended the dollar's gains against the euro to 6 cents since early May. US growth of 4 per cent in annualized terms in the second quarter came at a time when poor company results and concerns over a still escalating situation in Ukraine have added to worries that Europe will take far longer to recover. Euro zone data on Thursday showed inflation slowing to just 0.4 per cent, adding to those doubts and the pan-European FTSEurofirst 300 index .FTEU3 was down 0.7 per cent by midday, according to Reuters.