Investing.com – The dollar remained close to two-week highs against a basket of global currencies on Thursday, buoyed by a trio of upbeat economic reports lifting sentiment on the prospect of stronger U.S. economic growth.
A day after the Federal Reserve increased interests rate for the second time this year, signalling confidence in the U.S. economy, initial jobless claims and manufacturing data exceeded forecasts helping the dollar tack on gains against its peers.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.58% to 97.49.
The U.S. Department of Labor reported Thursday that initial jobless claims decreased by 5,000 to 237,000 in the week ended June 4, beating forecasts of a 3,000 decline.
On the manufacturing front, investors cheered a pair of upbeat economic reports on manufacturing activity in the states of New York and Philadelphia.
The Philly Fed said its index for current manufacturing activity in the region decreased to 27.6 in June from 38.8 in May. Analysts had expected a reading of 24.
Whereas, in New York, the Empire State manufacturing index climbed to 19.8, after falling to minus-1 in May.
The upbeat economic reports lifted expectations of an additional rate hike this year, after the Federal Reserve on Wednesday maintained its outlook of a total of three rates for 2017.
Sterling was one of the few currencies that shrugged off a surge in the dollar, with GBP/USD up 0.13% to $1.2763, as the Bank of England kept rates unchanged but stoked expectations of a future rate hike, revealing that an increasing number of its members favoured higher rates.
EUR/USD lost 0.63% to $1.1147 while EUR/GBP fell by 0.72% to 0.8737.
USD/CAD traded at C$1.3284, up 0.30%, as falling oil prices continued to weigh on the oil-linked Canadian dollar.
USD/JPY rose 1.20% to Y110.91, as investors ditched safe haven yen after the Federal Reserve rose its benchmark rate and quelled fears about a fall in consumer prices, saying that the dip in inflation was transitory.