Dollar Climbs Higher On Solid Data, Hawkish Fed Comments

(RTTNews) - The U.S. dollar firmed against most of its major rivals on Wednesday, as bond yields rose after some Fed officials suggested the possibility of more aggressive rate hikes to combat inflation.

Data from the Institute for Supply Management (ISM) showing an unexpected acceleration in the pace of growth in U.S. service sector activity in the month of July contributed as well to the currency's uptick.

The ISM said its services PMI rose to 56.7 in July from 55.3 in June, with a reading above 50 indicating growth in the sector. The uptick came as a surprise to economists, who had expected the index to dip to 53.5.

The unexpected increase by the services PMI came after the index edged down to its lowest reading since May 2020 in the previous month.

A separate report from the Commerce Department showed a significant increase in new orders for U.S. manufactured goods in the month of June.

The report showed factory orders shot up by 2% in June after surging by an upwardly revised 1.8% in May. Economists had expected factory orders to advance by 1.1% compared to the 1.6% jump originally reported for the previous month.

The dollar index climbed to 106.82 before paring some gains. Still, at 106.40, the index was up nearly 0.15% a little while ago.

Against the Euro, the dollar is trading at $1.0169, after having firmed to $1.0123 earlier in the day.

The dollar is trading at $1.2148 against Pound Sterling. Earlier, the dollar strengthened to $1.2100 from around $1.2210.

The Japanese currency is down at 133.92 yen a dollar, weakening from 132.30 yen.

Against the Aussie, the dollar has weakened to 0.6949 from 0.6919.

The Swiss franc has weakened to CHF 0.9602 from CHF 0.9652 a unit of dollar.

The dollar recovered to 1.2880 against the loonie after having dropped to 1.2833, but turned weak again and was hovering round 1.2840 a little while ago.