NEW YORK, Feb 14 (Reuters) - Euro zone growth numbers on Friday topped forecasts and helped push the euro to a nearly three-week peak against the dollar, which slid for a second straight day on accumulating worries about U.S. economic growth.

The dollar index of six major currencies on Friday slid to a low of 80.065, its 2014 bottom so far, and was last at 80.199, down 0.16 percent.

Britain's sterling rose to its highest in over five years against a basket of currencies, helped by a sharp rise against the dollar for four straight days. In late New York trading, the pound was up 0.5 percent against the dollar at $1.6739.

The dollar was down 0.28 percent against the yen at 101.87 yen and off 0.2 percent against the Swiss franc at 0.8918 francs to the dollar.

U.S. economic data has been dampened by a rough North American winter, disappointing many investors throttling back on dollar investments, according to analyst Joe Manimbo at Western Union Business Solutions in Washington.

"Until U.S. growth starts to show more promising potential, the dollar could be at risk for further slippage," Manimbo said in a commentary.

"The dollar is having a bad day," said Lane Newman, director of foreign exchange at ING Capital Markets in New York. "A lot of it has to do with positioning involving the euro."

The euro flirted with the $1.37 level, the top of the daily Ichimoku cloud, a technical measure of support and resistance which is significant for chartists. A close above that level could provide support to send the euro even higher. The euro was at $1.3699 in late trade in New York.

The single currency rose as high as $1.3715 after slightly stronger-than-expected growth in Germany and France pushed euro zone fourth-quarter GDP up 0.3 percent, above a forecast of 0.2 percent.
The data bolstered hopes the European Central Bank was less likely to take anti-deflation action next month and contrasted with a Washington report that U.S. manufacturing output during January marked its biggest monthly drop in 4-1/2 years.

The euro zone data is likely to help reduce expectations that the ECB will cut interest rates at next month's meeting, after President Mario Draghi last week declared more information was needed before deciding on any action.

"When you see better growth data the market quite simply thinks there's less chance of deflation and less chance of Draghi taking action, which is currency-supportive," said Jane Foley, senior currency strategist at Rabobank.

She said she expects no ECB action next month as Draghi will take "a few months at least" to assess the inflation data.

The Australian dollar was in focus after it dropped one full U.S. cent on Thursday in the wake of surprisingly weak labor data. It rebounded on Friday by 0.6 percent to $0.9033 helped by data showing China's consumer prices rose 2.5 percent in January, broadly in line with expectations.
China is Australia's main export market and the Aussie dollar is often used as a liquid proxy for investor bets on the Chinese economy.

Feb 10 (Reuters) - Deutsche Bank will cut commissions on four of its biggest European exchange-traded funds, or ETFs, in a move to take market share from rivals such as Vanguard and BlackRock and win over big institutional investors.

Deutsche Asset & Wealth Management (DAWM) aims to increase its German ETF market share to 20 percent from 12.5 percent by the end of 2015 and has rebuilt some of its most successful ETFs to hold shares rather than tracking indexes synthetically.
"We want to win over especially large institutional clients like pension funds, insurance companies and sovereign investors who have put little or no money in ETFs up to now," Simon Klein, managing director of asset management at DAWM, said.

Analyst Detlef Glow at fund research firm Lipper, a unit of Thomson Reuters, said: "It's a declaration of war ... With these four indices, Deutsche Bank is making the cheapest offer on the market."
Total cost for the four ETFs - which track the DAX, FTSE 100, Eurostoxx 50 and MSCI USA - will be 9 basis points, or 0.09 percent of assets, DAWM said in a statement. The company plans to expand the list of funds throughout the year.

That will match the lowest-priced European ETFs, offered by Vanguard and HSBC, both of which charge 9 basis points for their S&P 500-tracking ETFs.
And Deutsche will beat the price on Vanguard's FTSE 100 ETF, which at 10 basis points has until now been the cheapest in the market for that index.

The average cost to manage the 230-odd EFTs now on offer by Deutsche Bank is 32 basis points.
Investors and financial advisers have favoured low-priced, passively managed index funds over actively managed funds not only due to cost, but also because many active funds have underperformed the index-tracking ETFs.

"Up to now, ETFs were too expensive for pension funds to invest in. Many could build their own indices more cheaply. With Deutsche Bank's offer, ETFs will certainly become more attractive," Glow said.
Deutsche's biggest competitors in the ETF segment are BlackRock, the world's largest money manager, U.S.-based Vanguard and Lyxor, which belongs to French bank Societe Generale.
Deutsche Bank managed 931 billion euros at the end of 2013, placing it behind competitors including Bank of America, UBS und Credit Suisse.

LONDON, Jan 20 (Reuters) - The euro recovered slightly from a two-month low against the dollar on Monday, helped by higher short-term market interest rates, although speculation the European Central Bank may step in limited its gains.
After breaking through support at $1.3550 on Friday, the euro fell in Asian trading on Monday, touching its lowest since Nov. 25 at $1.35080. It later recovered some ground, and was 0.1 percent higher at $1.3550 early in London.

The single currency has weakened this month as year-end factors such as euro zone banks repatriating assets fade, with speculation the ECB will act to loosen liquidity meaning that even a rise in overnight borrowing rates has failed to lift it.
"We think that (the) key driver of the recent euro underperformance is growing market expectations of ECB action to address the tightening money market conditions," said Citi strategist Valentin Marinov.
Eonia, the euro zone overnight bank-to-bank lending rate, rose above 0.30 percent on Friday, more than the headline 0.25 percent rate that banks pay when they borrow at the ECB's still unrestricted lending operations.

After the central bank's January policy meeting, ECB President Mario Draghi said an "unwarranted" rise in the bank-to-bank lending rates that underpin euro zone borrowing costs would be one of the triggers for another rate cut or more drastic action.

One trader said the euro's rise may squeeze out some short-sellers but that the single currency could then head lower again, potentially entering a technical downtrend.
"The market has been focusing on broad dollar strength against everything except the euro ... The euro was playing catch-up," said Chris Turner, head of FX strategy at ING, referring to the euro's overnight weakness.
Turner said he expects the euro to fall to $1.33 this week and to $1.20 by the end of the year against a strengthening dollar as the Federal Reserve cuts back its huge bond-buying programme and as euro zone residents begin to invest abroad.

Investors were left looking for direction, with little economic data due out of Europe, other than German December producer prices that were slightly above forecast. U.S. markets are closed on Monday for Martin Luther King day.

The Australian dollar got some relief after China's annual economic growth in the final quarter of 2013 came in at 7.7 percent, down from 7.8 percent in the previous three months but slightly ahead of market expectations for growth of 7.6 percent.

"It's not a particularly good number but there wasn't any drop to levels below the 7.5 percent threshold," said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation.
While the data might have spurred some short-covering in the Australian dollar, the impetus is unlikely to be strong enough to prompt traders to go long the currency, he added.

The Aussie edged up 0.1 percent on the day to $0.8790 after earlier falling to $0.8756, its lowest level in about 3 1/2 years, in the wake of weak jobs data last week.
Traders said the 87 U.S. cent area should provide good support, as it did in 2010, although a break could see it test $0.8600 in a hurry.

Germany is flat-out waging economic war on its fellow EU countries…
The euro’s persistent strength has been bizarre. It does not make a lot of sense in light of Europe’s overall challenging economic conditions. This is partly because the ECB (European Central Bank) is incompetent. As Mark Blythe has observed, the ECB is not a “real” central bank. It is actually a currency board in drag, meaning the ECB can do some of the things a real central bank can do, but not the most important things.
Furthermore, many  assume that a strong currency is a sign of sensible monetary policy. But this is not always the cause. It is a misread of macroeconomics, overly focused on surface level interpretations – like the false idea it is always good to save and cut back on debt. These things are good in general overall terms, but there are certain situations where saving and cutting back on debt can actually shrink the size of your economy, and make your relative debt load even worse! (Macroeconomics can be weird.)


At any rate, Germany is a country unlike any other in the euro zone. The German psyche is historically shaped by two things: A passionate hatred of inflation and a laser-like focus on high-margin exports. (Think high end industrial equipment, BMWs and Mercedes, chemical processes and so on. Germany’s export mix is very similar to Japan’s.) Because Germany is so different from all the other countries in the euro zone, their solution to the financial crisis – “become more like us, be more German” – never actually made sense. When Germany tightens its belt and keeps costs down, this helps the German economy – because lower costs contribute to price competitiveness, which helps Germany pump out high-margin exports. But Greece, Spain, Portugal et al don’t have meaningful exports to speak of.

As Mark Blythe has put it (paraphrase): “What is Greece going to do, start making Audis? And if they did, who would buy them?”

Germany’s low inflation, cost-control economic solutions, in otherwords, are good for Germany specifically, because the Germans are so good at exporting. Low inflation is also a key consideration for a high-margin exporter… because again, it keeps you competitive. But this medicine is absolutely terrible for all the periphery countries. When your economy is saddled with an albatross of debt, and you are flirting with outright deflation – Greece recently posted the most deflationary numbers since records began, back in 1960 or so – German-style policy can kill you.

And this is exactly what is happening. The periphery countries are slowly being killed by creeping deflation and Great-Depression-like unemployment levels…
So on one level, the strong euro is a function of Germany, as the big dog in the mix, running monetary policy that is killing the periphery countries… and the periphery countries simply taking it. “Not our problem,” the Germans might say. “They shouldn’t have borrowed so much in the first place.” But do tell, Germany, who lent them all that money in the first place? And what did the periphery countries do with it? In large part they bought Audis, BMWs, espresso machines and the like… things exported by Germans. In sum, one can argue Germany has waged “war by other means” on its counterparts in the EU via economic dominance and ill-fit monetary policies. The wealthy Germans lent a ton of money to the sad-sack peripheries… took the profits when the periphery countries used that borrowed money to buy a bunch of “stuff” from Germany (via import imbalance)… and now that the periphery countries are choking on the debt, Germany owns them, psychologically and fiscally.

It is a good thing the broad masses do not actually understand macro. If they did, there would be many more riots in the streets. (Europe already has rioting in the streets, of course… but if the extent of this were known it would be worse…)
But wait. As Ron Popeil liked to say, that’s not all. Germany is also waging economic war on the Italians and the French! How so? Because Italy and France actually have competitive manufacturing industries that can export. Unfortunately for the Italians and French, however, these manufacturers are not as competitive as the Germans. Because Italy and France cannot match Germany, they must charge more to make a widget and still show a profit. This means that an expensive currency (the euro) hurts Italy and France’s ability to globally compete. Germany does not mind a strong euro, however, because it is one of the best in the world at what it does. Not only can German exporters tolerate a strong euro… they actually like it, because it lets them take manufacturing business away from the lesser equipped Italians and French!
We do not hate Germans by any means. (Some on the Mercenary team have German roots, and we have colleagues and friends in Berlin.) But the screwed up nature of what is happening in Europe right now nicely illustrates why ill-thought currency union among a wholly disparate group of countries, solely for the idealistic political purpose of avoiding war, was one of the worst ideas ever conceived. Lumping Germany in with all the others is like having a Friesian draft horse on a wagon-pulling team with a bunch of Chihuahuas. And whether it does so intentionally or completely by accident, Germany really is waging economic war on its fellow euro-using countries right now, in ways that will produce dramatic and dire results when things come to a head.

As Charles Gave of research house Gavekal has pointed out, the euro’s uncanny strength can be assigned to Germany too in respect to export foreign exchange impacts. Germany sells a hundred-billion-plus worth of exports to the world, with most of that inventory sold in dollars (the currency of international trade). Germany then trades those dollars for euros (because the Germans have little interest in buying US treasuries, like the oil exporters or China). That inflow from dollars back to euros thus pushes the euro higher… which is just fine by Germany, because it allows yet more manufacturing business to be taken from the Italians and the French, who get priced out of the game.

First and foremost we look at the world through a pragmatic lens, to try and spot where money can be made (or where risk is building). But we are also human beings, and cannot help but note the slow tragedy of what is unfolding. The toll taken on tens of millions of suffering Europeans is not an abstract thing. Suicides have spiked in the periphery countries. Many millions of youth in Greece, Spain and elsewhere – with youth unemployment levels well above 50 percent – are despairing of ever having a good job, ever, possibly assigned to menial labor and/or low value minimum wage type work for the balance of their lifetimes.
Imagine if that were the fate of your own children – not just to clean toilets or some such thing, but to do so in a foreign country where they were looked down on by the locals, because your own country cannot even offer up service jobs. Again from a broader perspective, looking beyond trading, this is the stuff that frightening political uprisings are made of. The ghost of Francisco Franco (a horrible fascist leader) is already stirring in Spain. The Golden Dawn, a neo-Nazi party in Greece, is gaining in popularity. And this is perhaps the greatest irony of all: While the euro was essentially dreamed up to bring Germany into the fold and head off the prospect of future wars, euro-driven policies are doing more to raise the prospect of future hot war – by laying a groundwork of shocking pain and suffering – than anything else has done.