U.S. Dollar Gains ahead of Key U.S. Economic Data

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U.S. Dollar Gains ahead of Key U.S. Economic DataThe U.S. dollar surged to its strongest level in nearly four months versus its major counterparts on speculation that strong job statistics may influence the Federal Reserve to reduce stimulus when its ends its monthly policy meeting today.

One dollar gauge, the Bloomberg Dollar Spot Index, which monitors the U.S. dollar versus 10 major counterparts, remained slightly unchanged at 1,017.49 as of 9:45 a.m. in London trading after earlier rising to 1,017.60, its strongest level since April 4. The measure surged 0.3 percent on Tuesday, its strongest advance since June 17.

The Reuters’ dollar index rose to a six-month high, touching 81.251 at 0626 GMT, as the market awaited results of Fed’s July policy meeting and U.S. gross domestic product data that is set to be released on Wednesday.

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The euro remained slightly unchanged at $1.3402 after earlier hitting $1.3395, its weakest point since November 13. The U.S. dollar traded at 102.17 yen compared with 102.12 on Tuesday, which followed an 8-day run on gains that was the most since October 2012.

“We’re starting to see more traction in the bullish dollar trade,” Michael Sneyd, a London-based FX strategist at BNP Paribas SA, told Bloomberg. “Investors don’t really have a long dollar position on in size. The data this week will be key in driving this dollar trend.”

The U.S. Commerce Department is expected to say that the country’s economy expanded by 3 percent in the April-June quarter, compared with a decline of 2.9 percent in the first quarter. Should it turn out so, this would be the fastest growth rate since the quarter through September 2013. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Yashu Gola at yashu@forexminute.com