French stocks traded higher on Wednesday as investors awaited key U.S. inflation data as well as a Federal Reserve policy decision later in the day for additional clues on the outlook for interest rates.
Euro zone government bond yields dropped after having risen to their highest levels in around seven months on Tuesday following Moody\'s warning of a downgrade on French debt.
The benchmark CAC 40 was up 26 points, or 0.3 percent, at 7,815 after closing down 1.3 percent the previous day.
The euro held steady while French 10-year bonds snapped four days of losses.
Banks were seeing broad-based gains, with BNP Paribas, Credit Agricole and Societe Generale rallying 1-3 percent.
Automaker Renault was moving lower ahead of an announcement regarding additional EU tariffs on imports of Chinese electric vehicles.