NEW YORK (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 labour 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.
Additional reporting by Ian Chua in Sydney; Editing by Pravin Char, Meredith Mazzilli and Nick Zieminski