Investing.com – The dollar rose against a basket of major currencies on Friday after data showed strong consumer and business spending underpinned faster-than-expected U.S. economic growth in the third quarter of the year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.39% to 94.92.
Gross domestic product increased at a 3.0% annual rate in the July-September period, the Commerce Department said in its initial estimate on Friday. That was above economists’ estimates for growth of 2.5%.
The upbeat growth comes amid reports suggesting that Fed Governor Jerome Powell and Stanford University economist John Taylor are President Trump's favoured candidates to replace Fed chair Janet Yellen when her term ends in February, Politico reported Thursday, citing a source.
Trump is expected to announce his candidate before a trip to Asia in early November.
The dollar is set to post its second straight week of gains as analysts continued to talk up the potential of further upside.
“I think the dollar is in a great spot now and looks poised for further medium-term gains. Nonetheless, it’s had an unusually good week, having gained against all the other G-10 currencies. There could be some profit-taking and position-closing ahead of the weekend,” said Marshall Gittler, chief strategist at ACLS Global, in a note.
Also adding to dollar strength was a continued slump in the euro following the European Central Bank’s decision to trim its bond its monthly purchases of bonds to €30 billion and somewhat dovish comments from ECB president Mario Draghi on Thursday.
USD/CAD rose 0.20% to C$1.2872 amid ongoing weakness in the loonie following Bank of Canada’s decision to keep interest rates unchanged on Wednesday.
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