London - Growing pressure for more policy easing in the euro zone pinned the euro near a 10-week low yesterday, while persistent tension in emerging markets drove Hungary’s forint to a 10-month trough and weighed on global stocks.

Stock markets in Europe reflected the weak appetite for riskier assets as they slid 0.6 percent, following shares in Asia. Emerging markets lost 6.6 percent last month, their worst January since 2009.

“It is a global macro question and global risk sentiment is really at stake here,” said John Hardy, the head of foreign exchange strategy at Saxo Bank in Copenhagen. “There are a lot of event risks this week and it just feels like markets are trying to figure out where they are.”

This week provides a raft of global business surveys and jobs data from the US to offer a clearer view on the global economy, while the European Central Bank (ECB) might well consider easing policy at its meeting on Thursday. The prospect of an ECB move weighed on the euro yesterday, pinning it near 10-week lows at $1.3490 following a break of major support at $1.3506.

A fall in euro zone inflation to 0.7 percent last month – far below the ECB’s 2 percent target – has raised the spectre of deflation, and with tumbling emerging market currencies threatening to compound the problem, calls are increasing on the bank to take action.

The pressure on the shared currency was eased slightly by data showing euro zone factories enjoyed their strongest month since mid-2011 in January and the first growth in Greek manufacturing activity since August 2009.

But reports that the euro zone is preparing for more debt relief for Greece reheated tensions in its debt market.

Emerging markets will also be high on the 24-member ECB governing council’s agenda. If a stampede out of developing markets forces the euro higher again, it could drive euro zone inflation unacceptably low.

There were signs Hungary was being dragged deeper into the mire as its forint nudged to a 10-month low, although a jump in January PMI data curbed the pressure. – Reuters