FXstreet.com (Barcelona) - European markets are trading lower for the second consecutive day on increased risk aversion produced by the Dubai's debt problems which have arisen doubts about the strength of global economic recovery. Euro and Pound have weakened against the Dollar.

Eurosttoxx 50 Index sheds 0.8%, while German DAX Index shed 0.65%, and the French CAC Index dips 0.58% in the first hours of trading. In the UK, the FTSE index drops 0.5%.

Investor's concerns about economic recovery has renewed, on the back of Dubai World's financial woes, showing that problems related to structural debts persist despite massive liquidity efforts by main governments around the world.

Euro and Pound pull lower

EUR/USD retreat from year high at 1.5145 on Wednesday extended during Asian session and the pair hit 1.4830 session low before picking up to test 1.4900 area at the moment of writing.

GBP/USD decline fro week highs above 1.6700, has extended during Asian session to 1.6270 high and the Pound is picking up on European session, reaching levels right below 1.6400 at the moment of writing.

USD/JPY extended losses during Asian session and the Dollar reached a fresh 14 year high at 84.80, to bounce up and consolidate at levels between 85.75 and 86.50.