RTTNews - The euro rallied to new multi-week highs against the lower-yielding dollar and yen amid increase risk appeal as traders bet the global recession could be approaching an end.

The euro extended its highest level in almost five months to 1.4166 against the dollar following the release of U.S. gross domestic product data. The common currency has been trending higher since yesterday morning and has added more than 3 cents off its lows of the week.

A Commerce Department report showed that gross domestic product fell 5.7 percent in the first quarter compared to the advance estimate of a 6.1 percent decrease. Economists had been expecting the pace of contraction to be revised to 5.5 percent.

The European currency was little-changed amid choppy trading with the pound, moving near 0.8740. The euro briefly jumped to a three-day high near 0.8800 against the sterling, but gave the gains back shortly there after.

A report from the Nationwide Building Society said the UK's house price index rose 1.2% in May from the prior month, reversing a 0.3% decline reported in April. House prices increased for the second time in three months. Economists were looking for a monthly decline of 0.9%.

The euro edged up to a 7 1/2-week high against the Japanese yen at 135.69 and remained level into the early afternoon. The common currency has been trending higher for two weeks.

Japanese national unemployment hit 5% in April, the highest since 2003, according to government data. The rate marked an increase of 0.2% from March, and was in line with the forecasts of most economists.

Eurozone annual inflation remained flat in May versus 0.6% in April. Economists had expected consumer prices to rise 0.2% year-on-year in May from the previous year. The Eurostat is slated to issue the final data on June 16.

The annual growth rate of Eurozone M3 money supply eased to 4.9% in April from 5% in March, the European Central Bank said. Economists had expected money supply to grow 4.5%.

Germany's Federal Statistical Office announced that the retail sales in real terms increased 0.5% month-on-month in April, compared with a 0.4% drop in the preceding month. This is in-line with economists' expectations.

Meanwhile, the European Central Bank President Jean-Claude Trichet said the ECB expects to engage in a scheme of buying euro-denominated covered bonds worth EUR 60 billion.

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