Signs that the US industrial slowdown might be nearing an end were offset yesterday by news of a sharp rise in underlying consumer prices.

Output from US factories, mines and utilities continued to fall last month but at a lower rate than expected and at the slowest pace since August, providing more evidence that the longest industrial decline since the Great Depression of the 1930s might be nearing an end.

That hope was given another boost by reports of a sharp drop in stockpiles of unsold goods.

The euro was lower but stood at recent highs against the dollar in late trade, as hopes grew of improvements in the euro-zone economy and US data suggested that aggressive rate-cutting may be over, dealers said. It rose to $0.9049 from $0.8926 overnight in New York.

The euro's firming came as euro sample coins became available in France, Ireland and the Netherlands. Sample kits will be rolled out in the nine other euro-zone countries tomorrow and on Monday.

Mr Ian Stannard, chief currency strategist at BNP Paribas, said the euro's appreciation was due to the currency's strength - as well as dollar weakness.

He said the markets are increasingly of the view that the monetary easing is coming to an end, and that yesterday's data back this up.

US industrial production fell 0.3 per cent in November, below the average forecast, after a 0.9 per cent plunge in October, the Federal Reserve said yesterday. Separately, the Commerce Department said total inventories for wholesalers, factories and retailers fell sharply in October.

The figures suggest the inventory glut that has depressed US production and investment and forced job cuts over the past year is on its way to being remedied.

In a separate report, the Labor Department said its consumer price index did not change last month, after declining 0.3 per cent in October. But the underlying CPI, which excludes food and energy costs, jumped by 0.4 per cent - the fastest rate in more than five years.

Economists added that headline inflation looked set to remain benign for the next few months, adding to speculation that the Fed's dramatic monetary easing is nearing an end and that the central bank will eventually raise short-term interest rates.

Mr Stannard also said the markets were anticipating some bullish news on the horizon in the euro zone, with Monday's Ifo business sentiment index in Germany set to report a monthly rise for the first time in three months - raising hopes that the German economy will begin to grow in the first quarter next year.