The U.S. dollar continued to be higher on Friday, as the U.S. economic growth was revised up in the second quarter, supporting hopes that the Fed is likely to raise interest rates by the end of this year.
Updated government data showed that the U.S. Gross Domestic Product expanded at a revised rate of 3.9 percent in the second quarter. This was revised up from the 3.7 percent growth that was reported last month.
The 3.9 percent growth in the April-to-June period represented a strong rebound after the first three months of the year, when the economy shrank by 0.2 percent.
Early in the day, Fed Chair Janet Yellen said the policy makers still plan to hike this year, joining several other speakers from the central bank, who supported the case for interest rate hike in recent days.
Speaking at the University of Massachusetts, Yellen said that the Federal Reserve remains on track to raise interest rates by year’s end, as she does not think signs of weak overseas growth would “have a significant effect on the path of policy.”
The speech was focused on inflation, which Yellen expects will return to 2% annual growth rate “over the next few years.”
The currency has been trading higher on the day, after her comments.
Subsequent to the GDP data, the greenback rallied 0.98 percent to hit more than a 2-week high of 121.23 against the Japanese yen, from Thursday’s closing quote of 120.05. If the greenback extends rise, 123.00 is possibly seen as its next resistance level.
The greenback rose back to 0.9818 against the franc after the data, heading to pierce its more than a 6-week high of 0.9843 hit at 4:05 am ET. The greenback is likely to challenge resistance around the 0.995 area.
The greenback moved back to the positive territory against the euro, trading at 1.1125. This is just few pips short from an early 2-day high of 1.1116. The pair was valued at 1.1228 when it closed Thursday’s trading. On the upside, the greenback may locate resistance around the 1.10 region.
The greenback hovered around a 3-1/2-month high of 1.5153 versus the pound, compared to 1.5241 hit late New York Thursday. The greenback is poised to find resistance around the 1.50 zone.
The greenback bounced off to 1.3347 against the loonie, off its early low of 1.3299. The next possible resistance for the greenback is seen around the 1.35 level.
The Markit’s flash services PMI and University of Michigan’s final consumer sentiment index for September are due shortly.
The material has been provided by InstaForex Company – www.instaforex.com