The euro brushed aside weaker-than-expected German growth numbers on Wednesday, drawing support from a narrowing yield gap between Bunds and U.S. Treasuries to rise against the dollar.

With German sovereign yields rising at a faster pace than U.S. ones, the gap between 10-year Bunds and U.S. Treasuries narrowed to around 157 basis points, from around 180 basis points about a month ago.

The euro was up broadly, rising 0.4 percent to $1.1260 and 0.3 percent to 134.81 yen. It also outpaced a buoyant British pound.

Data released on Wednesday showed the German economy grew by just 0.3 percent in the quarter from January to March. That undershot forecast for 0.5 percent growth and was far weaker than France, where the economy expanded 0.6 percent, its strongest in two years.

U.S. retail sales are expected to have risen a mere 0.2 percent in April, slowing from 0.9 percent in March, though sales ex-autos should be better.

San Francisco Fed President John Williams, addressing economists in New York on Tuesday, would not commit to a preferred time frame for hiking rates but stressed that policy changes would be data dependent.

The dollar index fell 0.2 percent to 94.375, pulling away from this week's high of 95.258 set on Monday. Investors have been pushing back expectations of when the Fed will start hiking rates after a disappointing first quarter for the economy. (Reuters)

Source: www.businessworld.ie