The dollar weakened against the euro and the pound amid a lack of US newsflow but strong economic data in Europe and the UK. The euro broke out of its recent range against the dollar to rise above 1.30, while the pound marked new 15-year highs by briefly pushing through the 1.9900 level. The common European currency was buoyed by robust industrial production figures this morning which suggest economic growth is not letting up in the euro zone. Industrial output in the euro zone in November rose 1.4 pct from October, and 6.2 pct from the year previous. "The underlying strength in euro zone manufacturing, at least until late 2006, and the signs that France is not missing out completely while Germany is surging ahead, project resilient economic growth ahead," said Holger Schmieding at Bank of America. He predicts that the European Central Bank will raise its key rate to 3.75 pct in March and then stay on hold before delivering another hike after the summer to bring the rate to 4.25 pct by early 2008. The pound is likewise supported by interest rate expectations, particularly after an upbeat survey on industrial trends by the Confederation of British Industry this morning. The survey said the number of firms raising their prices is at its highest level in nearly 12 years, adding more pressure on the Bank of England to hike rates to prevent a further spike in the decade-high inflation rate. "The increasing confidence among producers about their ability to impose price increases points to further monetary policy tightening," said Ross Walker at Royal Bank of Scotland. The pound is benefiting from these expectations, with some analysts expecting the Bank of England to raise rates again as soon as next month. More evidence for or against this scenario will come from the BoE governor Mervyn King's speech at 1900 today and from the minutes to the last policy decision, due tomorrow. The gains by the euro and pound were helped by a dearth of data in the US this week, which analysts said has deprived the dollar of any drivers. "The lack of US data this week is likely to leave the dollar vulnerable" - at least until Friday, when new home sales will be the focus, said BNP Paribas economists. The housing data will shed more light on whether the US property market is still suffering or whether its slowdown has bottomed out. Regarding the dollar weakness, the BNP economists also noted that "the dollar failed to gain sustained or broad-based support last week despite a stream of better-than-expected economic data releases as well as hawkish commentary from Fed officials," which may mean investors are still reluctant to price in a rate hike by the Fed this year.