The British Pound has dipped below $1.52, currently (February 26) trading at below $1.5. This is the lowest level for the British currency against the dollar since mid-May 2009.

The dollar has been relatively strong across the board, but the Pound has weakened as expectations for the economic future of Europe have diminished. Even a slightly improved British gross domestic product outlook could not inspire buying Friday morning.

New data on the fourth quarter gross domestic product for the US are set to be released later Friday morning. Most analysts expect the final data to show the GDP grew by the previously forecasted 5.7 per cent rate.

If the numbers on the US economy are in line, or even better, than expectations, this would certainly bode well for the dollar. Another report on home sales for January is due out. The housing sector is again being closely watched as lawmakers will soon be considering whether to let popular home buyer tax credits expire in April.

The Euro has been holding up a bit better against the dollar of late. One Euro is currently worth $1.3567, up about 1 pip in the last two days. However, the Euro appears primed for more weakness as many of its largest economies struggle to work out of their economic troubles.

Greece has recently shared very grim numbers on its economy and Spain is expected to be next. Spain is the fourth biggest European economy and it had a 3.6 per cent drop in GDP for 2009. Its 2009 GDP is anticipated to contract again and current unemployment in the country is a remarkable 19 per cent.

Greece and Spain represent just two of the many countries in the European Union that are dealing with worsening economic conditions. As the US appears on the verge of recovery, it appears likely the dollar is going to continue to improve its position. Fed Chief Ben Bernanke’s recent comments supporting a no to low interest rate policy may limit the strength of the dollar’s move, though, at least in the short-term.