Euro surges vs dollar on encouraging economic data

[NEW YORK] The euro surged higher against the dollar on Thursday after some encouraging economic data in the eurozone, including a welcome rise in prices and stronger-than-expected growth in Spain.

After four months in negative territory, eurozone inflation rose to zero in April as the European Central Bank conducts a massive bond-purchase program to stimulate the tepid economy. Spain's economic growth accelerated in the first quarter to the fastest pace since 2007.

"News that eurozone inflation climbed out of the red added to the euro's better bias," said Joe Manimbo at Western Union Business Solutions.

The euro climbed to US$1.1224 around 2100 GMT from US$1.1128 late Wednesday.

"The single currency rose for the sixth consecutive trading day to its strongest level since February," said Kathy Lien of BK Asset Management said in a research note. "The one thing that is NOT supporting the uptrend in the EUR/USD is fundamentals."

The dollar gained against the yen and the pound as US economic data came in better than anticipated. US jobless claims fell to a 15-year low and consumer spending in March rose 0.4 per cent, double the gain in February.

AFP