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Forex - Euro spikes higher after strong euro zone industrial production data
(Updating to add analyst comment, updated price) LONDON (Thomson Financial) - The euro spiked higher against the dollar after euro zone industrial production figures for January came in well above forecasts. Data showed industrial output for the region rose by 0.9 pct from December for a very strong 3.8 pct annual gain, way above the forecasts for much more moderate increases of 0.3 and 2.5 pct respectively. At 10.40 am, the euro was trading at 1.5463 against the dollar, having hit a day high of 1.5477 usd. Just before the data were released the euro had been trading at around 1.5384 usd. The euro thus regained most of the losses suffered against the dollar since yesterday's announcement of a series of liquidity injections by major central banks. 'By itself the industrial production data is not a major market mover, but the upside surprise does help consolidate a renewed upward move in euro/dollar,' said Calyon analyst Stuart Bennett. Most of the individual country data were already available and the risks to the euro zone figure had therefore been assumed to be to the upside, but the apparent strength of economies other than Germany is encouraging, he said. 'The resilience in French, Italian and Spanish provides some hope that the euro zone economy is not merely flying on one engine, namely Germany'. Solid figures such as this will enable the European Central Bank to stick to its hawkish mantra and leave interest rates where they are for now. However, most expect that at some point the strains of a very strong currency and a slowing global economy will start to take their toll. [email][email protected][/email] jkm/ejp COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.