Investing.com - The euro rose more than half a cent against the dollar on Tuesday, putting it on track for its largest one-day gain in a month bolstered by expectations that the euro area economy will remain strong.
EUR/USD was up 0.77% at 1.1756 by 08:40 AM ET (01:40 PM GMT) after data showing that the euro area economy grew by an annualized 2.5% in the third quarter, outstripping growth in the U.S. economy.
Another report showed that Germany’s economy grew a larger-than-expected 0.8% in the third quarter, thanks to strong trade and investment figures.
The upbeat data indicated that the European Central Bank’s tapering plans are likely to remain on track.
The euro rose to almost one-month highs against the pound, with EUR/USD climbing 0.87% to 0.8972.
Sterling remained on the back foot after UK inflation data for October came in slightly lower than expected.
The data sparked concerns that the Bank of England may have acted too sooU.S. producer prices increase more than expected in Octobern when it raised interest rates for the first time in almost a decade earlier this month.
Sterling was also pressured by concerns over Theresa May’s ability to remain on as British prime minister at a critical juncture in Brexit talks.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.46% at 93.97, pressured lower by the stronger euro.
The dollar shrugged off data showing that U.S. producer prices rose more than expected in October, surprising economists who had expected a slight decline.
The Commerce Department reported that the producer price index increased 0.4% last month and by 2.8% from a year earlier. Economists had forecast an increase of 0.1% last month and a rise of 2.4% from a year ago.
The dollar was a touch lower against the yen, with USD/JPY slipping 0.07% to 113.53.
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