* German, French GDP beat forecasts ahead of euro zone
* Dollar weak after U.S. retail sales data
* Australian dollar lifted by China CPI
By Laurence Fletcher
LONDON, Feb 14 Better-than-forecast German and
French economic growth numbers on Friday helped the euro
advanced to its highest level in almost three weeks against a
dollar weakened by soft U.S. data.
It rose 0.2 percent to $1.3712, as economic growth
in Germany - the euro zone's largest economy - unexpectedly
accelerated to 0.4 percent in the fourth quarter, while growth
in France also beat forecasts and third quarter numbers were
Investors will also look to euro zone GDP numbers, due at
1000 GMT, for further support for the euro's rally this month
against the greenback.
"German GDP didn't bring any surprises but French did," said
Dag Muller, technical analyst at SEB in Stockholm. "That helps."
He pointed to order flows that pushed the euro higher
against the dollar ahead of Thursday's poor U.S. retail sales
data, and highlighted key levels at $1.3740 and $1.3562.
"It ($1.3740) is a point where those who want to trade
euro-dollar on the short side will give up," he said. "But if it
breaks Wednesday's low of $1.3562 then euro-dollar bears will
start to smile again."
The euro was flirting with the $1.37 level, the top of the
daily Ichimoku cloud, a technical measure that is significant
for chartists as a close above that level could be seen as
sending the euro higher.
It was also helped as the spread of U.S. 2-year Treasuries
over 2-year German bunds fell.
Yields were weighed down by U.S. retail sales, which fell
unexpectedly in January, while more Americans filed for jobless
benefits last week, the latest signs the world's biggest economy
started the year on a softer footing as bad weather took its
The dollar index slid to a low of 80.102, reaching a
level last seen on Jan. 2, and was last at 80.158, down 0.2
percent. It was down 0.3 percent against the yen at 101.83 yen
The falls come despite new Federal Reserve chairman Janet
Yellen's testimony this week that the central bank was on track
to keep reducing its stimulus even though the labour market
recovery was far from complete.
"The recent string of worse-than-expected indicators from
the U.S. are calling into question the recovery scenario there,"
Marshall Gittler, head of global FX strategy at IronFX Global,
The Australian dollar was in focus after it dropped one full
U.S. cent on Thursday in the wake of surprisingly weak labour
However, it continued to rebound on Friday, rising 0.5
percent to $0.9018, helped by data from China that
showed consumer prices rose 2.5 percent in January, broadly in
line with expectations.
China is Australia's main export market and the Aussie
dollar is often used as a liquid proxy for China plays.