LONDON (Reuters) - The euro rose off the day's lows on Friday and stocks recouped losses after Germany's Christian Social Union party denied it would dissolve its alliance with Chancellor Angela Merkel's Christian Democrats.
A report to that effect had appeared earlier on a hoax Twitter account, briefly rattling markets.
The single currency (EUR=EBS), which briefly slipped into negative territory on the report, bounced a quarter of a percent after the denials and was trading at $1.1596.
Germany's DAX (GDAXI) rapidly recovered most of its losses after the report, to trade 0.2 percent down on the day, while safe-haven German 10-year government bonds saw yields rise slightly off the session low of 0.38 percent (DE10YT=RR) which was touched after the reports.
The disagreement between Merkel's Christian Democrats (CDU) and their Bavarian Christian Social Union (CSU) sister party on the refugee issue threatens the future of her coalition three months after it took office.
On Friday, a senior CSU lawmaker said they want to preserve the parliamentary alliance with Germany's Merkel.