Investing.com – The dollar rose to a four-day high on Friday buoyed by upbeat U.S. economic growth data, which eased concerns of a slowdown in the U.S. economy, fuelling expectations the Federal Reserve would hike its benchmark rate in June.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.23% to 97.36 by 13:00 EDT.
The U.S. economy slowed less than initially expected in the first quarter. Gross domestic product increased at a pace of 1.2%, well above the 0.7% rise reported last month.
In a separate report, The Commerce Department said durable goods orders fell 0.7% in April after rising 2.3% in March. Economists had expected a 1.2% drop in durable goods order.
The bullish GDP data quelled fears that slower U.S. economic growth would sway the Federal Reserve away from its commitment of two additional rate increases in 2017.
The minutes to the Federal Reserve May 2-3 meeting revealed that some Fed officials cautioned that longer-term rate increases would be subject to economic data, showing the dip in first quarter economic growth had been “transitory”.
The pound fell sharply against the dollar to $1.2797, down 1.12%, with an opinion poll showing a narrowing in the Conservatives’ lead over Labour, raising uncertainty over the appeal of Theresa May’s leadership and the ruling party’s election manifesto.
A YouGov poll put the Conservative lead at five points, which is well below the Conservatives' sizeable 20-point lead held over Labour last month.
EUR/USD fell to $1.1176, down 0.30%, while EUR/GBP added 0.58% to 0.8735.
USD/JPY dipped to 111.35, down 0.43%, while USD/CAD fell by 0.16% to $1.3463, as the oil-linked Canadian dollar, received a boost, after oil prices recovered from a nearly 5% drop in the previous session.