Euro rises on German growth data The euro rose after figures showed the eurozone had escaped recession, bouncing off a fresh multi-month low to gain ground against the dollar, the pound and the yen. News that German economic growth was higher than expected in the first quarter of the year meaning eurozone growth was flat after sinking in the previous quarter, sparked a muted return in risk appetite across the currency markets, with the yen and dollar falling in value. The euro rose 0.3 per cent to $1.2860, having earlier touched a fresh low after the Greek elections nine days ago of $1.2812, its weakest level since mid-January. It rose 0.4 per cent against the pound to £0.7994 and was 0.3 per cent higher against the yen at Y102.70. Traders at investment banks said, however, that market participants appeared to be selling into rallies, with the outlook for the single currency remaining difficult. Citigroup's London office reported overall selling of the euro among clients, with most of the downward pressure coming from banks, while long-term investors were net buyers and speculators were mixed. The Australian dollar rose 0.5 per cent amid the improved risk appetite, reaching $1.0016 against the US dollar after falling below parity for the first time this year on Monday. The Canadian dollar rose 0.3 per cent to C$0.9988. The pound resumed its downward trend against the dollar after reaching a year-high at the end of April. Sterling had risen in the previous session but on Tuesday was 0.2 per cent lower against the dollar at $1.6065, ahead of a quarterly report on inflation from the Bank of England to be released on Wednesday. Analysts said that expectations were growing that the BoE might signal future monetary easing because of the recent strength of the pound and the effect it could have on the economy. "The pound's appreciation since the last inflation report is likely to be a major discussion point in this week's report and, with sentiment and positioning having turned very GBP-positive, we think the major sensitivity is to any hint that the implicit tightening of policy is unwelcome," said Adam Cole at RBC Capital Markets.