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Euro welcomes solid growth data, hits 3-week high in Europe

February 14, 2014

Better-than-forecasted Eurozone growth report released in Europe on Friday helped push the euro to its highest levels in almost three weeks against the already weak U.S. dollar. Eurozone Recovery Accelerates More Than Expected In Fourth Quarter The single currency added 0.10 percent through the day, hitting a 3-week high of $1.37132 after data showed Eurozone economic recovery picked up speed in the final quarter of 2013, suggesting the currency block is slowly recovering after periods of recession. The economy of the 18 countries that shared the euro rose 0.3 percent in the three months to December after 0.1 percent expansion a quarter ago, while annual Gross Domestic Product (GDP) rose 0.5 percent, above market expectations of a 0.4 percent rise. Euro gained over dollar today, last trading at $1.36967 after hitting a session high at $1.37132 and falling to a session $1.36729. The pair opened at $1.36775. The EURUSD pair is expected to face resistance at $1.37393; stabilizing above these levels could show strong upside move. France And Germany Add To Signs Of Recovery In Eurozone The expansion was led by Europe`s largest economy, Germany, which benefited from a rise in exports. German GDP - the euro zone`s largest economy - which accounts for 30% of the euro zone total, unexpectedly accelerated to 0.4 percent in the fourth quarter. France - the euro zone`s second economy – also posted better-than-expected growth figures for the last three months of 2013, a welcome surprise for the Continent's economy as it struggles to break free from a long period of lethargy. The French fourth-quarter figure, expanded by 0.3 percent in the period from October through December compared with 0.1 percent contraction in the previous three months and was slightly better than the 0.2 percent economists had been expecting. Euro, however, weakened against the pound and yen, falling almost 0.18 percent against the sterling pound and 0.23 percent against the yen. The EURGBP pair is currently trading at 0.81977 after opening at $0.82100. The EURJPY pair was last seen at ¥139.385. Dollar Falls For A Third Session Against Yen The dollar index USDIX slid to a low of 80.14, and was last at 80.17.  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. Yen jumped 0.39 percent against the U.S. dollar on Friday, trading at ¥101.786 after opening at ¥102.157. The USDJPY pair so far hit a session high of ¥102.395 and a session low ¥101.564.

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Source: Financial Markets

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