Investing.com - The dollar initially popped higher before turning lower against the other major currencies on Friday after Federal Reserve Chair Janet Yellen said the case for U.S. interest rate hikes has “strengthened”.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, initially hit highs of 94.98, before pulling back to 94.39, down 0.32% for the day.
The dollar initially strengthened after Yellen said in a speech at Jackson Hole that the case for raising U.S. interest rates has strengthened in recent months, citing improvements in the labor market and hopes for modest economic growth.
But the dollar then reversed initial gains on the view that the timing of any such monetary tightening is still some way off.
The U.S. central bank raised interest rates for the first time in almost a decade in December.
Expectations of higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.
Earlier Friday, official data showed that U.S. second quarter growth was revised down slightly.
The Commerce Department said U.S. economic growth in the three months to June was revised to an annual rate of 1.1%, from an earlier estimate of 1.2%.
The euro was slightly higher, with EUR/USD up 0.11% to 1.1294.
The dollar was weaker against the yen, with USD/JPY down 0.28% to 100.23.
Sterling also pushed higher, with GBP/USD rising 0.3%% to 1.3231.
Earlier Friday, data confirmed that the U.K. economy grew by 0.6% in the second quarter and expanded 2.2% on a year over year basis, in line with preliminary readings and economists’ forecasts.
The data indicated that the U.K. economy remained strong ahead of the Brexit referendum.