Forex - Euro hits fresh all-time highs against the pound

Fri, Mar 28 2008, 10:40 GMT
http://www.afxnews.com

LONDON (Thomson Financial) - The euro marked record highs against the pound after mixed UK economic data and more hawkish rhetoric from the European Central Bank.

The pound has been weaker since earlier this morning, when data showed consumer optimism running at a 15-year low.

The consumer confidence index from pollsters GfK/NOP fell another two points from February to -19 in March, while Nationwide revealed a 0.6 pct monthly drop in house prices in March to bring the annual rate to just 1.1 pct -- the slowest since March 1996.

The UK current account deficit improved to 8.5 bln stg in the fourth quarter from a record of 19.1 bln stg in the third quarter and much better than the 18.5 bln stg expected by analysts. GDP growth, meanwhile, was confirmed at 0.6 pct in the fourth quarter.

The euro, for its part, was boosted by hawkish rhetoric from ECB rate-setter Axel Weber, who suggested the ECB would not cut rates any time soon by stressing that the current interest rate level guarantees price stability.

German import prices this morning surprised to the upside, rising 1.1 pct in February from January, almost twice analysts' forecast for an increase of 0.6 pct.

The euro touched 0.7916 stg in the wake of Weber's comments after hitting 0.7914 stg earlier this morning.