The US dollar extended yesterday’s rally today as positive economic data from the United States fueled talks about a possibility of an early interest rate hike from the Federal Reserve.
US gross domestic product expanded 3.5 percent in the third quarter of this year. While the growth was below the revised previous quarter’s 4.6 percent, it was still above economists’ expectations of 3.1 percent. The number of initial claims for unemployment benefits was little changed at 287,000 last week.
The dollar surged yesterday after the Federal Reserve ended its quantitative easing program and signaled that monetary tightening can happen earlier in case macroeconomic data warrants it. The latest indicators were positive, increasing chances for an early increase of borrowing costs, helping the greenback to extend its rally today.
EUR/USD dropped from 1.2636 to 1.2607 as of 23:12 GMT today, reaching the daily low of 1.2547. GBP/USD declined from 1.6011 to 1.5991, and its daily minimum was at 1.5951. USD/JPY advanced from 108.83 to 109.33.
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