Euro Surges Against Pound, Remains Near 2009 Highs Against Dollar

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The euro held its gains against the dollar and rallied against the pound on Tuesday in New York as encouraging economic data drove traders toward the higher-yielding currency. Stocks saw moderate strength, helping risk appeal.

The European currency recovered early losses against the dollar to remain near its highest level in a year and surged to a multi-month best versus the British pound.

A closely watched survey revealed German investor confidence rose less than expected in September, but reached its highest level in more than three years.

The Centre for European Economic Research or ZEW said its economic sentiment indicator for Germany rose to 57.7 points in September from 56.1 in August. Economist had forecast a reading of 60. This value is well above the indicator's historical average of 26.6 points.

The euro recovered earlier losses versus the dollar reaching as high as 1.4632, compared to the multi-month high of 1.4643 reached yesterday.

The U.S. Commerce Department released a report today morning showed that retail sales jumped 2.7 percent in August following a revised 0.2 percent decrease in July. Economists had been expecting a more modest increase in sales of about 1.9 percent compared to the 0.1 percent drop originally reported for the previous month.

The euro surged to a four-month high of 0.8893 against the British pound. The rally took the 16-member currency ahead of a resistance level.

Data released by the Office for National Statistics showed that British consumer price annual inflation stood at 1.6% in August, down from July's 1.8%, but above the consensus forecast of 1.4%. This was the lowest rate since January 2005.

The euro remained in a range near a five-day high against the yen, trading near 133.00.

(Market News Provided by RTTNews)