Investing.com - The dollar rose against a basket of major currencies on Thursday, after a flurry of bullish comments from Federal Reserve officials offset news that the Trump administration is studying ways to penalize currency manipulators.
The greenback dipped briefly, after CNBC reported Thursday, the Trump administration is “assessing the scope of its power to penalize countries whose currencies it believes are undervalued”.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, added 0.37% to 100.16 by 13:00 EDT.
In what was quiet day on the economic data front, better than expected U.S. gross domestic product (GDP) and a flurry of bullish comments from Cleveland Fed President Loretta Mester and San Francisco Fed President John Williams supported upside momentum in the greenback.
The Commerce Department earlier reported that U.S. gross domestic product grew faster than previously reported in the fourth quarter.
Cleveland Federal Reserve Loretta Mester reiterated her hawkish view concerning interest rate hikes Thursday, as she said that “further removal of accommodation via increases in the fed funds rate will be needed” should economic conditions “evolve as anticipated”.
Fed President John Williams, tapered some of his bullish rhetoric on the U.S. economy, after he said even though the economy shows “consistent” and “encouraging” signs, “housing still isn’t quite back”.
Meanwhile, sterling held firm despite the rally in the dollar, with GBP/USD, up 0.42% to $1.2488. The rebound in sterling came a day after Prime Minister Theresa May triggered Article 50.
Elsewhere, the euro slumped against the dollar, after both German and Spanish inflation slowed more sharply than expected in March.
EUR/USD fell 0.54% to $1.0707 while EUR/GBP nosedived 0.90% to 0.8581.
USD/JPY traded higher at 111.38, while USD/CAD dipped 0.27% to $1.3293.