Dollar Holds To Gains Ahead Of GDP Update
The U.S. dollar edged higher against the euro and the Japanese yen Thursday as investors watched for word about possible military action against Syria.
It also rose ahead of a possible upward revision to the pace of quarterly U.S. economic growth.
The ICE dollar index , a measure of the U.S. unit against six rivals, rose to 81.430 from 81.415 late Wednesday. It reached as high as 81.51 early Thursday, according to FactSet.
The WSJ Dollar Index , which uses a wider comparison basket than the ICE index, rose to 73.91 from 73.84.
Meanwhile, the dollar bought 97.79 Japanese yen, slightly more than ¥97.71 late Wednesday in North America.
The euro fetched $1.3316, down from $1.3341 late Wednesday.
The greenback on Wednesday absorbed safe-haven flows in anticipation of a possible military strike led by the U.S. against Syria, which Washington accused of using chemical weapons in an attack near Damascus last week.
U.S. President Barack Obama said in an interview with PBS Newshour Wednesday that there need to be “international consequences” for Syria’s action. Obama said he has yet to decide what the U.S. response will be.
Meanwhile, the U.K. indicated it will wait until a parliamentary vote before joining any U.S. effort in Syria, according to The Wall Street Journal.
With markets watching U.S. data closely ahead of the Federal Reserve’s meeting next month, investors will look later Thursday for the second reading of U.S. gross domestic product for the second quarter.
Analysts polled by MarketWatch expect GDP to be revised to as high as 2.3%, from an initial reading of 1.7%.
“Confirmation of continued economic recovery in the U.S. could further increase bets on early quantitative-easing tapering by the U.S. Fed and hence further aid the dollar,” said ICICI Bank analysts on Thursday.
The Fed currently buys $85 billion a month in assets, a program that’s been seen as putting pressure on the dollar’s value.
A report on weekly claims for unemployment benefits is also due, with improvement in the labor market a key factor in the Fed’s decision about slowing the pace of bond buys.
Elsewhere Thursday, the British pound was unchanged at $1.5526. But the Australian dollar rose to 89.73 U.S. cents from 89.46 U.S. cents.
Meanwhile, the U.S. dollar fell against the Indian rupee after Indian officials moved to help the badly beaten currency. The U.S. dollar bought 67.475 rupees, less than 68.825 rupees late Wednesday. The dollar early Thursday fell to as low as 66.780 rupees.
The rupee caught a break from its recent tumble to multi-year lows after the Reserve Bank of India on Wednesday said it will sell U.S. dollars from its reserves to three oil companies in order to meet their daily dollar requirements. Oil companies make up roughly 40% of demand for dollars on average each month, according to the Times of India.
The dollar sales were to be effective immediately with no end date set, according to a central bank.
Source : Marketwatch
