Dollar Hold Gains As Gap Between US And Europe Widens

Washington (Aug 29)  The dollar held near its highest in almost a year on Thursday as dismal German economic data cemented expectations for stimulus from the  European Central Bank  .

At the same time, a strong reading on US second quarter GDP had traders betting the Federal Reserve may hike rates sooner than forecast.

Revised figures announced by the  US Commerce Department  showed that Gross Domestic Product, a broad measure of economic activity, rose by 4.2% in the April-to-June period.

Safe haven currencies like the dollar and yen were also lifted by renewed concerns about the situation in  Ukraine  .

 Ukraine's  government has accused  Russia  of invading his country along its south-eastern border.

"Recent Russian actions clearly demonstrate that  Moscow  is bluntly drawing  Ukraine  and the entire world into a full-scale war,"  Ukraine's  foreign ministry said in a statement.

The dollar rose to  USD1.3170  versus the euro, staying around an 11-month peak set earlier in the week.

German unemployment unexpectedly rose in August as the euro zone's largest economy continued to show signs of strain. The number of people out of work climbed a seasonally adjusted 2,000 to 2.901 million in August, official data showed.

Meanwhile, euro zone economic confidence weakened more-than-expected in August to its lowest level in eight months.

The economic confidence index fell to 100.6 in August, the lowest score since December, from 102.1 in July, the  European Commission  said Thursday.

The buck edged slightly higher to  USD1.6571  versus the sterling, having recently touched a 4-month peak near  USD1.6540  .

The dollar was stuck below  Y104  versus the yen, unable to build this month's gains.

Source: AllianceNews