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Forex - Dollar index moves lower, U.S. data on tap

Investing.com -

Investing.com - The dollar moved lower against other major currencies on Thursday, despite growing expectations for a U.S. rate hike next month and upbeat U.S. economuic reports on Wednesday, as investors eyed the release of additional U.S. data later in the day.

EUR/USD gained 0.28% to 1.0629, off the previous session's one-month trough of 1.0520.

The greenback had strengthened broadly after Federal Reserve Chair Janet Yellen told the U.S. Senate Banking Committee on Tuesday that the central bank will likely need to raise interest rates at one of its upcoming meetings.

Ms. Yellen said that waiting too long to raise interest rates would be "unwise," given the rise in inflation and economic growth.

The U.S. dollar was also underpinned by strong U.S. inflation and retail sales data released on Wednesday, which boosted optimism over the economy and added to expectations for a near-term rate hike.

Market participants were looking ahead to reports on the U.S. housing sector and unemployment claims, as well as data on manufacturing activity in the Philadelphia area, due later in the day, for further indications on the strength of the economy.

Elsewhere, GBP/USD rose 0.37% to 1.2505.

USD/JPY declined 0.40% to 113.68, after hitting a two-week high of 114.97 on Wednesday, while USD/CHF dropped 0.34% to trade at 1.0021.

The Australian dollar was lower, with AUD/USD down 0.27% at 0.7688, off a three-month high of 0.7732 hit overnight, while NZD/USD held steady at 0.7220.

The Australian Bureau of Statistics earlier reported that the number of employed people increased by 13,500 in January, beating expectations for a 10,000 rise. The number of employed people climbed by 16,300 in December, whose figure was revised from a previously estimated 13,500 gain.

The report also showed that Australia's unemployment rate ticked down to 5.7% last month from 5.8% in December. Analysts had expected an unchanged reading in January.

Meanwhile, USD/CAD slid 0.24% to trade at 1.3050.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was down 0.29% at 100.79, off the previous session's five-week high of 101.75.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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