The euro extended gains versus the U.S. dollar to hit a session high during early trading on Thursday on expectations interest rates in the euro zone will rise earlier than those in the United States. The euro rose as high as $1.3819, its strongest level since Feb. 3, before retreating to $1.3800, up 0.4% on the day.
A leading indicator released yesterday was the German Final GDP. Germany holds the largest and strongest economy in the Euro-Zone, and thus the relevant publications from this economy usually have a hefty impact on the EUR. The German economy may gather strength in the current quarter after the coldest winter since 1969 curbed construction activity in the final three months of 2010. Business confidence jumped to a record high this month and unemployment is the lowest in almost two decades. Bundesbank President Axel Weber last night indicated the central bank has raised its 2011 growth forecast to 2.5% from 2%. The economy expanded a record 3.6% in 2010.
Looking ahead to today, the most important economic indicator scheduled to be released from the Euro-Zone is the German Prelim CPI. Analysts are forecasting this figure to increase from its previous reading. Traders will be paying close attention to today's announcement as a stronger than expected result may boost the EUR in the short-term. Traders are also advised to follow the Revised GDP figures coming out of Britain at 9:30 GMT, and the U.S GDP figures at 13:30 GMT as these results may set the EUR's main currency crosses for the day.