Dollar hits 4-week high on taper talk

The dollar was headed a third
straight weekly gain on Friday (August 30th) as upbeat data
from the US raised expectations the Fed will taper its bond buying
programme next month.

Data showed the US
economy grew faster than previously thought, with revised
figures showing GDP expanding at 2.5 per cent in the
second quarter, up from the 1.7 per cent originally
thought.

In addition, the Department of
Labor reported that the number of individuals filing for initial
jobless claims fell to its lowest level since October of 2007 last
week.

The dollar index, which measures
the greenback against a basket of currencies, touched on 82.10
overnight in Asian trade, its highest since August 2nd.

Positive US data lends support to
speculation the Fed will scale back the size of its asset purchases
in September.

Elsewhere the combination of solid
US data and dovish comments from Bank of England governor Mark
Carney weighed on sterling’s exchange
rate.

GBP/USD hit a session low
of 1.5483 on Thursday before consolidating around 1.5522,
still well off Monday’s high of 1.5612.

Meanwhile, the pound was up against
the euro, with EUR/GBP trading at 0.8529.