Euro climbs after French and German GDP data

The euro climbed against the dollar on Friday after strong growth data in Germany and France bolstered expectations a healthy euro zone economy will keep interest rates in the region higher than their U.S. equivalents.

A report showing U.S. consumer prices rose as expected in April on higher food and energy prices added to the dollar's weakness, as there was little sign of a broader pick-up in inflation that would trouble the Federal Reserve. [ID:nOAT004810].

But some analysts said the euro's rebound from recent losses could prove short-lived as concerns about debt problems in peripheral euro zone states may outweigh rate differentials.

"If the U.S. inflation number had come in worse than expected it would have pressured the Fed but that didn't happen and the market is a little bit short euro after the sell off in recent days," said Joseph Trevisani, chief market analyst at FX Solutions in Saddle River, New Jersey.

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- Posted: 2011-05-13 08:38:18

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