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.