Investing.com - The dollar rose to three-and-a-half week highs against the other major currencies on Wednesday, as the previous session’s upbeat U.S. data continued to support the greenback and as investors awaited the minutes of the Federal Reserve’s most recent policy meeting later in the day.
USD/JPY rose 0.24% to 109.38.
Market participants were looking ahead to the minutes of the Fed’s most recent policy meeting, due later in the day, for indications on the timing of future interest rate hikes.
Expectations for an upcoming U.S. rate hike mounted after data on Tuesday showed that U.S. consumer prices rose at the fastest rate in more than three years in April.
Prices rose by 0.4% in April, the biggest one-month gain since February 2013, the Labor Department said on Tuesday.
Separate reports showed that housing starts and industrial production also rose strongly last month.
In addition, Atlanta Fed President Dennis Lockhart and San Francisco Fed President John Williams both said on Tuesday that there could be two or three rate hikes this year.
In Japan, data earlier showed that the economy grew by an annualized 1.7% in the three months to March, well ahead of forecasts for a 0.2% increase and recovering from a 1.7% contraction in the previous quarter.
EUR/USD dropped 0.35% to 1.1273, the lowest since April 25.
Eurostat said on Wednesday that euro zone consumer prices fell at an annual rate of 0.2% in April, in line with expectations.
The dollar was higher against the pound and the Swiss franc, with GBP/USD down 0.32% at 1.4414 and with USD/CHF rising 0.25% to 0.9831.
Sterling shrugged off a report by the U.K. Office for National Statistics showing that the claimant count fell by 2,400 in April, against expectations for an increase of 4,300. March’s claimant count was revised up to 14,700, the biggest monthly increase since September 2011.
The U.K. unemployment rate remained stable at 5.1%, in line with economists’ forecasts.
Wage growth continued to pick up, with average weekly earnings rising by 2.0% in the last three months, up from 1.9% in the three months to December.
But excluding bonuses, salaries rose by 2.1%, slowing from 2.2% the previous quarter.
The Australian and New Zealand dollars were weaker, with AUD/USD down 0.66% at 0.7278 and with NZD/USD declining 0.59% to 0.6772.
Elsewhere, USD/CAD climbed 0.51% to trade at 1.2973.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.36% at 94.89, the highest since April 25.