The Dollar rallied on Thursday, rising to a three-month high against the Yen, on data showing the US economy grew in Q1 faster than previously estimated and as hawkish Federal Reserve comments boosted expectations for an interest rate increase this year. Dallas Fed’s Fisher said on Wednesday the Fed could increase benchmark rates sooner rather than later if inflation expectations worsen. The comments prompted a jump in short-dated US Treasury yields on Thursday. Data on Wednesday showing US durable goods orders fell by a smaller-than-expected 0.5% last month bolstered a view that the Fed may have left its aggressive campaign to ease monetary policy behind it for now after slashing target borrowing costs to 2%.
Demand for the greenback accelerated after the government said the US economy grew at an upwardly revised 0.9% pace in Q1. Buoyant US stocks and a $4 a barrel drop in the price of Oil added to investor enthusiasm for the Dollar.
Yesterday, EurUsd was 0.89% lower at 1.5517, weekly lowest. UsdJpy traded up 0.88% at 105.57 retreating from a three-month high of 105.87. UsdChf went up 1.21% at 1.0497. GbpUsd dropped 0.34% to 1.9748.