LONDON: European stocks struggled higher in morning deals on Friday and the euro retreated against the dollar after Greece reached a debt swap deal with private creditors to avert bankruptcy.
Traders were meanwhile looking ahead to US jobs data due on Friday for clues of economic recovery in the world's biggest economy, while continuing to react to a weak outlook for the eurozone.
"Markets turned moderately positive (after) the closely watched, biggest sovereign debt swap on record," said Anita Paluch, a trader at Gekko Global Markets.
"It (is) not that all the problems are gone, as this is just the beginning of the road to recovery."
London's benchmark FTSE 100 index edged up 0.03 percent to 5,861.70 points in morning trading, Frankfurt's DAX 30 gained 0.30 percent to 6,854.92 points and in Paris the CAC 40 won 0.05 percent in value to stand at 3,479.95.
The European single currency fell to $1.3222 from $1.3274 late in New York on Thursday.
Greece said on Friday it had been successful with a "historic" debt swap, opening the way for an urgent second bailout to save the country from bankruptcy and the eurozone from a new crisis.
The International Swaps and Derivatives Association (ISDA), an organisation representing over 815 market institutions, is expected to determine later on Friday whether the Greek debt cut constitutes a credit event that would trigger the credit default swaps.
"The focus now ahead for today will be on waiting for a formal announcement from ISDA on whether a credit event has occurred," said Derek Halpenny, European head of currency research at The Bank of Tokyo-Mitsubishi UFJ in London.
Private creditors have tendered bonds amounting to 83.5 percent of debt covered by a deal to cancel half the amount owed -- a write-off worth 107 billion euros ($142 billion) on the basis of full acceptance.
"This is a historic moment for the country," government spokesman Pantelis Kapsis told private television station Mega.
"It enables us to go forward to stabilise the economy and to promote growth," Kapsis said.
The success of the debt swap is a vital step for Greece to be able to avoid a default as early as March 20 when it has to repay some debt. Default would be catastrophic for Greece and could cost the eurozone one trillion euros and send shockwaves around global financial markets.
"The markets were already pricing in a respectable participation rate for the bond swap, although there is still some uncertainty over whether the use of the collective action clause by the Greek government is a credit event which will trigger credit default swap pay-outs," said Fawad Razaqzada, an analyst at traders GFT Markets.
"Nevertheless, Greece stumbles on, although it seems unlikely that the second bailout will put an end to the country's problems. Investors will also be wondering if Ireland, Portugal and Spain will soon be requesting a similar debt relief deal."
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