European stocks rally on US-Japan trade optimism, FX markets mixed

European equity markets posted solid gains during Wednesday's morning session, with major indices climbing 0.5-0.8% on positive sentiment surrounding the US-Japan trade agreement. The deal's potential to boost global trade flows lifted risk appetite, though currency markets showed divergent reactions. EUR/USD remained range-bound near 1.0920, lacking clear directional momentum despite the risk-on environment. GBP/USD edged 0.1% lower to 1.2845 as traders awaited UK economic data releases. The Swiss franc weakened marginally against major counterparts, with USD/CHF rising to 0.8975 as safe-haven demand diminished. Market participants noted the disconnect between equity optimism and currency market caution, suggesting forex traders remain focused on central bank policy divergences rather than trade developments. Near-term currency volatility appears limited, with major pairs consolidating within recent ranges ahead of key economic releases later this week.