Investing.com - The dollar was steady near nine-month highs against the other major currencies on Thursday after solid U.S. data reinforced expectations that the Fed will hike U.S. interest rates this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 98.68, not far from Tuesday’s nine-month peak of 99.09.
The index has rallied 3.4% so far this month as hawkish remarks by Fed officials in recent weeks cemented expectations for a December rate hike.
U.S. data on Wednesday showed that new home sales rose in September after a sharp fall in August, pointing to ongoing momentum in the housing market. A separate report showed that U.S. service sector activity expanded at the fastest rate in 11 months in October.
The reports came as investors were turning their attention to Friday’s figures on U.S. third quarter growth. The data is expected to show a significant rebound from the second quarter.
Investors are currently pricing in a 72.0% chance of a rate hike at the Fed's December meeting; according to federal funds futures tracked by Investing.com's Fed Rate Monitor Tool.
Expectations for higher interest rates typically boost the dollar by making the currency more attractive to yield-seeking investors.
The dollar was near three-month highs against the yen, with USD/JPY up 0.16% to 104.63.
The euro was steady, with EUR/USD at 1.0903.
Meanwhile, sterling was lower ahead of U.K. data on third quarter growth, which will show how the economy is responding to uncertainty created the June 23 Brexit vote.
GBP/USD fell 0.33% to 1.2204.