Investing.com - The dollar extended gains against the other major currencies on Thursday, after data showing that U.S. economic growth accelerated in the second quarter added to expectations for a rate hike later this year.
The Commerce Department said U.S. gross domestic product expanded at an annual rate of 2.3% in the three months to June. First quarter growth was revised up to 0.6% from a previously reported contraction of 0.2%.
Although economists had forecast growth of 2.6% the report still indicated that the economy is on a solid footing.
Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 25 rose by 12,000 to 267,000 from the previous week’s total of 255,000. Analysts had expected initial jobless claims to rise by 15,000 to 270,000 last week.
The data came after the Fed said in its rate statement on Wednesday that the economy and the labor market had continued to strengthen, reinforcing expectations for an initial rate hike at its September meeting.
Fed officials said they felt the economy had recovered from a first-quarter slowdown and was now "expanding moderately."
Fed Chair Janet Yellen has said the central bank could raise rates as soon as September if the economy continues to improve as expected.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.49% to 97.70, the highest level since July 22.
EUR/USD dropped 0.56% to one-week lows of 1.0922.
Data earlier showed that the number of unemployed people in Germany rose by 9,000 in July, disappointing expectations for a 5,000 decline, after a revised increase of 1,000 in June.
A separate report showed that German consumer prices ticked up 0.2% this month, below expectations for a 0.3% rise.
The dollar rose to almost two-week highs against the yen, with USD/JPY up 0.37% to 124.39.
The dollar rose to three-month highs against the Swiss franc, with USD/CHF up 0.34% to 0.9711 and held steady against the pound, with GBP/USD at 1.5608.
The commodity linked currencies were broadly lower, with AUD/USD slipping 0.21% to 0.7280, not far from Tuesday’s six year lows of 0.7256, while NZD/USD tumbled 1.16% to 0.6588. USD/CAD climbed 0.63% to 1.3026.