The dollar strengthened against all the major currencies on Thursday as fears of a military strike against Syria faded and official data showed that U.S. second quarter growth came in higher than expected, indicating that the U.S. economic recovery remains on track.
The U.S. Commerce Department announced that gross domestic product (GDP) expanded at an annual rate of 2.5% in the three months to June, above expectations for growth of 2.2% and up from a preliminary estimate of 1.7%.
The positive news came after the Labor Department reported that the number of people seeking unemployment assistance fell by 6,000 last week, to a seasonably adjusted rate of 331,000, the lowest level in more than five years.
The upbeat data boosted expectations that the Federal Reserve could start phasing out its $85 billion-a-month bond buying program, perhaps as early as next month.
Meanwhile, the single currency came under added pressure after official data showed that German unemployment figures unexpectedly rose in August, for the first time in three months. The number of people out of work climbed by a seasonally adjusted 7,000 to 2.95 million.
EUR/USD fell 0.76% at the close of the U.S. session, to 1.3238.
In the U.K. the British pound found support during the European session on expectations the Bank of England may raise interest rates earlier than expected, following recent improved U.K. economic data. But ultimately surrendered to the dollar after U.S. GDP figures were released.
GBP/USD fell 0.19% to 1.5498.
Elsewhere the greenback strengthened against the Canadian dollar as traders fear tomorrows GDP data may show the nation’s economy shrank in June.
USD/CAD climbed 0.52% to 1.0533.
- See more at: http://www.forexnews.com/blog/2013/08/29/dollar-strengthens-on-upbeat-data-and-other-top-forex-news/#sthash.Otx8VmWq.dpuf
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