Euro and pound off highs as better US data and Fed comments strengthen dollar; BoE chief Mark Carney's speech awaited

The euro has slipped off its near three-week high as better than expected US data and hawkish Fed remarks strengthened the dollar overnight. The pound is also down ahead of a speech by Bank of England Governor Mark Carney.

The EUR/USD traded at 1.0829 at 7:35 GMT on Friday (27 March) from the previous close of 1.0884, further distancing from the multi-week high of 1.1053 touched on Thursday.

The GBP/USD slipped to 1.4812 from 1.4849. The pair has been on a downward trend since 20 March and the 18 March multi-year low of 1.4634 is now not far away.

Initial jobless claims in the week to 20 March in the US was 282,000 less than 291,000 in the previous week and beating analysts' expectations of 290,000, data showed on Thursday (26 March).

In addition, the composite PMI measure by Markit rose to 58.5 for March from 57.2 in February while analysts had been expecting a drop to 57.0.

Atlanta Federal Reserve President Dennis Lockart has said that the US economy is strong enough to start raising rates after mid-year, providing another boost to the dollar bulls.

Data from the eurozone early Friday was slightly better than expected but could not prevent the fall in the euro while the UK data was negative adding to the downward pressure on the sterling.

The German import price index fell 3.0% from a year earlier in February, data showed on 27 March, less than the 4.4% fall in January and analysts' expectations of a 3.5% drop. Month-on-month, the index rose 1.4% reversing the 0.8% fall of the previous month and beating market expectations of a 0.7% rise.

The Nationwide house price index growth eased to 5.1% on a year-on-year basis for March from February's 5.7% growth, data from the UK showed. On a monthly basis, however, the index rose 0.1% reversing the 0.8% fall last month.

BoE Governor Carney will deliver a speech at 8:45 GMT and MPC member Ben Broadbent will speak half an hour later. Remarks by the policymakers will be watched for rate cues.

The final reading of US Q4 gross domestic product data will be out later in the day and also the Reuters/Michigan consumer confidence indicator for March.

Federal Reserve member Stanley Fisher will speak some two hours before the GDP data at 12:30 GMT after which the focus will shift to the speech by Fed Chair Janet Yellen at 19:45 GMT. Yellen's remarks will, however, show its effect only on Monday.