* BoE could be first major central bank to tighten policy
* Euro hurt by Coeure's comments at Reuters Summit
* Aussie, NZ dollars ease back from 1-month highs
By Michael Connor
NEW YORK Feb 12 The British pound rose to a
two-week high against the dollar on Wednesday after the Bank of
England raised growth forecasts and hinted Britain may raise
interest rates next year.
Prospects of a rate hike in the second half of 2015 by the
BoE prompted investors to buy sterling against currencies like
the euro, the yen and the Swiss franc
The euro fell more than 1 percent against sterling and was
softer against the dollar, which gained broadly.
"It's a sterling day," said David Gilmore, partner at FX
Analytics in Essex, Connecticut.
Sterling jumped to a two-week high of $1.6580, up
0.8 percent on the day, and well above $1.6480 before the report
was released as investors brought forward expectations of the
first rate hike.
"The BoE seems to become the first major central bank, bar
the Reserve Bank of New Zealand, to hike interest rates," said
Chris Turner, chief currency strategist at ING. "We are
expecting a rate hike in February 2015, so in the short term
sterling looks good, especially against the euro."
Against the dollar, the euro was down 0.40 percent at
$1.3583 ; against the yen, it was down 0.65 percent at
The euro was also hurt by weak economic data and comments
from ECB Executive Board member Benoit Coeure, who said the bank
was "very seriously" considering a negative deposit rate. The
rate, at which banks park surplus funds with the central bank,
is now zero percent.
Industrial output for the euro zone in December fell 0.7
percent on the month, after a downwardly revised 1.6 percent
rise in November and much sharper than a 0.3 percent fall
The euro's losses lifted the dollar index 0.13 percent to
80.742, pushing it above a two-week low of 80.448. The
dollar was also helped by comments on Tuesday from new Federal
Reserve chief Janet Yellen that the Fed was committed for now to
winding down its stimulus measures.
Earlier, Australia and New Zealand dollars hit one-month
highs as improved Chinese trade data eased concerns about growth
in the world's second-biggest economy and bolstered demand for
China's trade performance beat forecasts in January as
import growth hit a six-month high, which soothed recent fears
that the world's second-largest economy is slowing down. China
is Australia's biggest export market.
The Aussie dollar hit a high of $0.9068, its
strongest level since Jan. 13, before easing to trade at
$0.9039, flat on the day.
The New Zealand dollar also retreated in later
trade after hitting a one-month high of $0.8370 and stood
nearly unchanged for the day at $0.8320 in New York.