US Economic Growth Rises, Dollar Gain Towards


United States Dollars (USA) headed for its biggest monthly rise against the euro since February last year. Signs of the United States economy gained makes the traders improve predictions for higher interest rates.

World's largest economy grew by 4 percent in the last quarter, rebounding from the 2.1 percent contraction in the previous three months and beat analysts' estimates by 3 percent. 10-year Treasury yield rose to 2.56 percent yesterday, the highest since July 16.

"The tide has turned in the market after GDP data, with the long-term yields rose again, increasing the momentum for the purchase of dollars. Investors have a positive sentiment in the strong payrolls report," said association of foreign exchange trading at Bank of Tokyo-Mitsubishi UFJ Ltd., Naohiro Nomoto, as reported by Bloomberg on Thursday (31/07/2014).

US dollar was little changed at USD1,3397 per euro, after rising 2.1 percent this month. US dollar was little changed at USD102,77 per Japanese yen, having advanced to the nine previous trading day. The euro was unchanged at USD137,71 per Japanese yen.

The Labor Department said employers have added 231,000 jobs in July, slightly lower than the previous month's jobs data was 288,000. While the unemployment rate is expected to last at 6.1 percent, lowest in nearly six years.

The Bloomberg Dollar Spot Index, which tracks the dollar against 10 major currencies, was little changed at 1020.18, after rising 1.7 percent this month, the most since May 2013.

Traders see there are approximately 87 per cent chance the central bank will raise its benchmark interest rate target to at least 0.5 per cent in September 2015, based on futures contracts. That was up from an initial estimate of 78 percent at the beginning of July.

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