* German, French GDP help euro zone data beat forecasts
* Australian dollar lifted by China CPI
By Michael Connor
NEW YORK, Feb 14 Euro zone growth numbers on
Friday topped forecasts and helped push the euro to a nearly
three-week peak against the dollar as investors bet action to
avert deflation by the European Central Bank next month was less
The single currency rose as high as $1.3715 after
slightly stronger-than-expected growth in Germany and France
pushed euro zone fourth-quarter GDP up 0.3 percent, above a
forecast of 0.2 percent.
The dollar was weak after softer-than-forecast U.S. data on
Thursday and traded lower on Friday even after a
better-than-expected report of American consumer sentiment.
The dollar index on Friday slid to a low of 80.065,
its lowest since the start of the year, and was last at 80.199,
down 0.16 percent. The dollar was down 0.25 percent against the
yen at 101.885 yen.
"The dollar is having a bad day," said Lane Newman, director
of foreign exchange at ING Capital Markets in New York. "A lot
of it has to do with positioning involving the euro."
The euro zone data is likely to help reduce expectations
that the ECB will cut interest rates at next month's meeting,
after President Mario Draghi last week declared more information
was needed before deciding on any action.
This week ECB Executive Board member Benoit Coeure said the
idea of cutting the rate the ECB pays banks to hold their
deposits overnight into negative territory was "a very possible
"When you see better growth data the market quite simply
thinks there's less chance of deflation and less chance of
Draghi taking action, which is currency-supportive," said Jane
Foley, senior currency strategist at Rabobank.
She said she expects no ECB action next month as Draghi will
take "a few months at least" to assess the inflation data.
U.S. economic data has been dampened by a rough North
American winter, disappointing many investors throttling back on
dollar investments, according to analyst Joe Manimbo at Western
Union Business Solutions in Washington.
"Until U.S. growth starts to show more promising potential,
the dollar could be at risk for further slippage," Manimbo said
in a commentary.
The euro flirted with the $1.37 level, the top of the daily
Ichimoku cloud, a technical measure which is significant for
chartists. A close above that level could provide support to
send the euro even higher. The euro was at $1.3684 in
late-morning trade in New York.
The Australian dollar was in focus after it dropped one full
U.S. cent on Thursday in the wake of surprisingly weak labour
data. It rebounded on Friday, gaining 0.47 percent to $0.9022
with help from data out of China that showed consumer
prices rose 2.5 percent in January, broadly in line with
China is Australia's main export market and the Aussie
dollar is often used as a liquid proxy for investor bets on the