* Euro survives GDP test but outlook still poor
* Disappointing data keeps pressure on ECB to do more
* Dollar index in consolidation mode after last month's
By Ian Chua
SYDNEY, Aug 15 The euro steadied early on
Friday, brushing aside soft euro zone inflation and
disappointing growth data that kept alive prospects of more
stimulus from the European Central Bank.
The common currency was little changed at $1.3363,
having recovered from a brief dip to $1.3348. Still, it remained
near a nine-month trough of $1.3333 and was on track to end
lower on the week.
It was choppy against the yen, drifting to a 1-1/2 week high
of 137.25 before slipping back under 137.00 for a
nearly flat finish in New York. It was last at 136.93.
"The issue is, and this is hard to measure quantifiably,
that traders were expecting the weakness," said Christopher
Vecchio, currency analyst at DailyFX, of the euro zone GDP data.
Therefore, euro bears were left wanting more, he added.
Data on Thursday showed growth in the euro zone stalled in
the second quarter, with Germany suffering a surprise
At the same time, inflation in the region was confirmed to
have slowed to levels not seen since the height of the financial
crisis nearly five years ago, leaving deflation a very real
With the euro reluctant to move lower for now, the dollar
index struggled to make much headway.
Traders said the market also tried to mark down the
greenback after a report showed the number of Americans filing
new claims for unemployment benefits rose more than expected
It was last at 81.617 after ending nearly flat in New York.
However, the index was still within striking distance of an
11-month peak of 81.716 set last Wednesday.
Dollar bulls have been looking for fresh reasons to drive up
the index after last month's 2.1 percent rally - the biggest
monthly gain in over a year.
They are likely to have to wait a little longer given an
absence of major economic data in Asia and with many European
centres closed for the Assumption Day holiday on Friday.
(Editing by Shri Navaratnam)