Forex – Dollar Hits Day’s Highs as U.S. Growth Revised Higher

© Reuters. Dollar hits day’s highs as U.S. growth revised higher – The dollar rose to the day’s highs against a basket of the other major currencies on Wednesday after data showing that U.S. economic growth was faster than initially estimated in the fourth quarter.

The , which measures the greenback’s strength against a basket of six major currencies, was up 0.35% to 89.26 by 08:53 AM ET (12:53 GMT), extending its recovery from Tuesday’s five-week low of 88.53.

The Commerce Department reported that on a year-over-year basis in the final three months of 2017, up from an earlier estimate of 2.5%, but slowing slightly from 3.2% in the third quarter.

Consumer spending was revised up to 4.0% from 3.8% in the second estimate, which was the biggest increase in three years.

The data left the way clear for a slightly more aggressive pace of interest rates hikes by the Federal Reserve this year. The Fed hiked rates for the first time this year last week and stuck to its projection for three rate hikes this year.

The upbeat data offset simmering concerns over the prospect of a trade war between the U.S. and China.

Renewed fears over the prospect of trade war hit market sentiment on Wednesday after the state run Chinese newspaper the Global Times reported that Beijing will soon announce in response to proposed U.S. tariffs on Chinese imports.

Reports that U.S. President Donald Trump discussed with German Chancellor Angela Merkel and French President Emmanuel Macron also dented hopes that the risk of a trade war was easing.

Investors’ fears that trade tensions between the world’s two largest economies could escalate out of control and deal a blow to the global economy.

The dollar surged against the yen, with advancing 0.78% to 106.16.

The yen remained under pressure after Bank of Japan Governor Haruhiko Kuroda said on Wednesday the central bank needs to to meet its inflation target.

The euro fell to the day’s lows, with down 0.14% to 1.2386.

The pound was also lower, with sliding 0.11% 1.4141.

Investors were looking ahead to U.S. data on pending home sales later in the day.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.