FOREX-Sterling rises on hints of 2015 rate hike as euro dips

Reuters

* BoE could be first major central bank to tighten policy

* Euro hurt by Coeure's comments at Reuters Summit

* Aussie, NZ dollars ease back from 1-month highs

By Michael Connor

NEW YORK Feb 12 (Reuters) - The British pound rose to a two-week high against the dollar on Wednesday after the Bank of England raised growth forecasts and hinted Britain may raise interest rates next year.

Prospects of a rate hike in the second half of 2015 by the BoE prompted investors to buy sterling against currencies like the euro, the yen and the Swiss franc .

The euro fell more than 1 percent against sterling and was softer against the dollar, which gained broadly.

"It's a sterling day," said David Gilmore, partner at FX Analytics in Essex, Connecticut.

Sterling jumped to a two-week high of $1.6580, up 0.8 percent on the day, and well above $1.6480 before the report was released as investors brought forward expectations of the first rate hike.

"The BoE seems to become the first major central bank, bar the Reserve Bank of New Zealand, to hike interest rates," said Chris Turner, chief currency strategist at ING. "We are expecting a rate hike in February 2015, so in the short term sterling looks good, especially against the euro."

Against the dollar, the euro was down 0.40 percent at $1.3583 ; against the yen, it was down 0.65 percent at 139.085 yen.

The euro was also hurt by weak economic data and comments from ECB Executive Board member Benoit Coeure, who said the bank was "very seriously" considering a negative deposit rate. The rate, at which banks park surplus funds with the central bank, is now zero percent.

Industrial output for the euro zone in December fell 0.7 percent on the month, after a downwardly revised 1.6 percent rise in November and much sharper than a 0.3 percent fall forecast..

The euro's losses lifted the dollar index 0.13 percent to 80.742, pushing it above a two-week low of 80.448. The dollar was also helped by comments on Tuesday from new Federal Reserve chief Janet Yellen that the Fed was committed for now to winding down its stimulus measures.

Earlier, Australia and New Zealand dollars hit one-month highs as improved Chinese trade data eased concerns about growth in the world's second-biggest economy and bolstered demand for riskier assets.

China's trade performance beat forecasts in January as import growth hit a six-month high, which soothed recent fears that the world's second-largest economy is slowing down. China is Australia's biggest export market.

The Aussie dollar hit a high of $0.9068, its strongest level since Jan. 13, before easing to trade at $0.9039, flat on the day.

The New Zealand dollar also retreated in later trade after hitting a one-month high of $0.8370 and stood nearly unchanged for the day at $0.8320 in New York.

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