Euro climbs to twoyear high

European shares sank on Friday as the euro strengthened and company earnings disappointed at the end of a turbulent week.

The euro climbed to a two-year high on Friday, sending the exporter-heavy STOXX 600 down 1 percent to a weekly decline of 1.7 percent. Euro zone stocks fell 1.3 percent while blue chips sank 1.4 percent.

The weekly loss came after the STOXX 600 had its strongest week in more than two months, indicating a sharp turnaround in sentiment.

However, money kept flowing into European equities, with the largest inflows to the region in 10 weeks, some $3 billion. Investors pointed to inflows as mitigating muted second-quarter earnings growth.

A strong euro still spooks European stock traders, even when Mario Draghi starts talking up the region’s economy.

The Euro Stoxx 50 Index slid 2.1 percent as the currency soared toward its highest level since January 2015 after European Central Bank President Draghi said that officials will reassess stimulus in autumn. His remarks on Thursday that the region’s economy is finally enjoying a “robust recovery” and an unchanged quantitative-easing program did little to rein in the moves.

Equity investors are struggling to get used to the prospect of life without the ECB providing a floor to markets. While their reliance on the central bank for cues has eased somewhat -stocks and the euro are both up for the year -this week’s moves show Draghi’s words still hold sway. The currency gains put even more pressure on European companies to generate better earnings at home to counter the blow to exporters.

Asia’s equity benchmark rose 4.4 percent in the nine sessions through Thursday, with markets in Japan and Hong Kong near two-year highs. On Friday, Asian equities fell for the first time in 10 days, as investors chose to take some profit off the table amid the investigation into the U.S. president that may stall his economic agenda.