U.S. Dollar Climbs As Strong Economic Data Raises Rate Hike Bets

(RTTNews) - The U.S. dollar drifted higher against its major counterparts in the New York session on Thursday, as the economy expanded much more than previously estimated in the first quarter and weekly jobless claims decreased unexpectedly last week, strengthening expectations for two more rate hikes from the Federal Reserve.

Data from the Commerce Department showed that gross domestic product jumped by 2.0 percent in the first quarter compared to the previously estimated 1.3 percent increase. Economists had expected the pace of GDP growth to be unrevised.

The stronger than previously estimated growth reflected upward revisions to exports and consumer spending that were partly offset by downward revisions to nonresidential fixed investment and federal government spending.

Data from the Labor Department showed an unexpected pullback in first-time claims for U.S. unemployment benefits in the week ended June 24.

The report said initial jobless claims fell to 239,000, a decrease of 26,000 from the previous week's revised level of 265,000.

Economists had expected jobless claims to rise to 270,000 from the 264,000 originally reported for the previous week.

U.S. treasury yields rose, with the benchmark 10-year yield touching 3.84 percent. Yields move inversely to bond prices.

The greenback appreciated to 6-day highs of 1.0860 against the euro and 0.9001 against the franc, from its early lows of 1.0941 and 0.8943, respectively. The greenback is seen finding resistance around 1.05 against the euro and 0.92 against the franc.

The greenback advanced to more than a 2-week high of 1.2590 against the pound and a 7-1/2-month high of 144.89 against the yen, off its early lows of 1.2666 and 144.13, respectively. The greenback may find resistance around 1.24 against the pound and 148.00 against the yen.

The greenback firmed to a 2-week high of 1.3285 against the loonie and a 3-week high of 0.6050 against the kiwi, reversing from its early lows of 1.3242 and 0.6102, respectively. The greenback is poised to challenge resistance around 1.35 against the loonie and 0.59 against the kiwi.

The greenback rebounded to 0.6599 against the aussie, heading to pierce its previous more than 3-week high of 0.6595. If the currency rises further, it may find resistance around the 0.64 level.