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Dollar hits two-week high vs yen after upbeat U.S. data

8/31/2017, 10:03:35 AMBasics of Trading
Dollar hits two-week high vs yen after upbeat U.S. data

The dollar hit a two-week high versus the yen on Thursday, extending its gains after strong U.S. economic data bolstered expectations for a solid U.S. jobs report later this week.

The dollar rose to as high as 110.545 yen , its strongest level since Aug. 16. It last changed hands at 110.51 yen, up 0.2 percent from late U.S. trade on Wednesday.

The greenback gained a lift after the Commerce Department said on Wednesday that its second estimate of U.S. gross domestic product showed that the economy grew at an annual 3.0 percent annual in the second quarter, the quickest in more than two years. In addition, the ADP National Employment Report showed U.S. private-sector employers hired 237,000 workers in August for the biggest monthly increase in five months, driving expectations for a solid U.S. August non-farm payrolls figure.

In the wake of such solid economic indicators, market expectations for the chances of a Fed rate hike in December may start to increase and support the dollar, said Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore.

"I think the market is starting to think that eventually the wage growth component is going to start to kick in," Innes said, adding that the dollar may attract demand ahead of the U.S. nonfarm payrolls data due on Friday.

The euro nursed its wounds after falling 0.7 percent against the dollar on Wednesday in its biggest daily percentage drop against the dollar in nearly four weeks.

The euro edged up 0.1 percent on the day to $1.1890 , having retreated from a more than 2-1/2 year high of $1.2070 set on Tuesday.