FX round-up: Euro jumps to six-week high against dollar

Date: Monday 30 Jan 2012

The dollar weakened against major currencies on Friday as data showed the US economy grew at a slower than expected rate in the fourth quarter.

Meanwhile the euro made headway against the dollar, buoyed by hopes that Greece is close to reaching a deal with creditors to reduce its debt. The single currency rallied to a six week high of $1.322 before easing to $1.3216 from $1.3106 on Thursday.

Speaking at the World Economic Forum in Davos European Monetary Affairs Commissioner Olli Rehn commented that a deal on Greek debt could be reached at the weekend. It is crucial Greece reaches a deal with its creditors quickly to receive the next tranche of its cash bailout instalment and avoid a default on its debt.

In the US the latest figures showed the economy grew at a 2.8% annual rate in the final quarter of the year, confounding expectations of 3% growth.

The dollar index, which measures the US currency against a basket of six other currencies, retreated to 78.854 from 79.416 the previous session.

Selling pressure on Thursday, following the Federal Reserve's pledge that it will keep interest rates ultra low through to 2014, continued on Friday. For the week, the dollar index fell 1.7%.

The dollar traded at ¥76.72 ¥77.49 the previous session while sterling rose to $1.5724 from $1.5687.

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