Sterling powered to a four-month high against the dollar and gained ground against the euro after strong economic data supported expectations that the BOE will keep interest rates on hold. The dollar slipped ahead of key economic growth data, after large swings in the market. Currencies are settling as traders see whether US GDP figures give investors reasons to sell the dollar.

GBP
UK GDP rose by 0.6 per cent in the fourth quarter, when market expectations were at only 0.5 per cent, and better than the previous quarter at 0.4 per cent.

USD
The greenback dollar barely moved despite disappointing existing homes sales. For the third month in a row, existing homes sales weakened.

EUR
In a market focused on dollar weakness, even a strong German IFO index failed to help the euro sustain any gains. The euro's failure to hold on to its post IFO gains and its decline after the larger than expected 5.7 per cent drop in US housing sales, was attributed to technical factors, which maintain some semblance of stability in the US currency.

JPY
The dollar strengthened against the yen and not even bullish minutes from the recent monetary policy meeting managed to lift the yen any higher.

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