Dollar boosted by strong US GDP which was revised higher

The U.S. dollar benefited from upbeat U.S. GDP data as well as jobless claims figures on Thursday. The dollar index held near one-week highs of 96.031 set overnight.

GDP adds to the positive flow of domestically oriented U.S. data the Federal Reserve desires to see when considering a rate hike.

GDP rose at a 3.7 percent annualised rate, beating all estimates of most economists and up from the 2.3 percent reported in the first estimate.

Initial jobless claims were down for the first time in five weeks, falling 6,000 to a seasonally adjusted 271,000 for the week ended August 22. Economists had forecast claims falling to 274,000 last week.

USD/JPY bounced above 121.00, pulling well away from Monday’s low of 116.15. The yen showed a muted reaction to data showing Japan’s inflation fell to zero percent, the lowest in two years.

EUR/USD came close to 1.1200, having been knocked off its peak above 1.1700 and last stood at 1.1258.

GBP/USD extended its decline, after briefly dipping below 1.5400 for the first time in over a month on Thursday. It last stood at 1.5412.

Commodity currencies including the Australian dollar managed to outperform their U.S. peer after a solid rebound in Chinese equities helped lift risk appetite generally.

AUD/USD rose to 0.7184, from 0.7163 early, moving some distance away from a 6-1/2-year trough set on Monday. Key resistance was found at 0.7250 and a break could see a big short-squeeze higher. Still, the Aussie is down 1.7 percent this week on fears of a hard landing in China’s economy. China is Australia’s top export market.

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