The dollar advanced on its major counterparts on Friday, garnering support from reports on US economic growth and consumer sentiment as well as position-squaring.
Ahead of the weekend and the start of the Republican National Convention tomorrow in New York, the dollar rose to three-week peaks versus the euro and Swiss franc, while exiting active trading higher against the British pound and little changed versus the yen.
Trading was restrained, however, as investors have been avoiding big bets either for or against the dollar ahead of the Republican party conclave and the August employment report scheduled for release on Sept. 3, said Nick Bennenbroek, senior foreign exchange strategist at Brown Brothers Harriman in New York.
In late afternoon trading, the euro was at US$1.2016, down from US$1.2115 late Thursday. The dollar was at ?109.63, up from 109.33. The pound, meanwhile, was at US$1.7895, down from US$1.7966, while the dollar was stronger versus the Swiss franc, at SF1.2823 from SF1.2718. The dollar was also higher against the Canadian dollar at C$1.3135 from C$1.3070 late Thursday.
As reported, the University of Michigan's index on consumer sentiment for August rose to 95.9, up from its 94.0 reading in a preliminary survey, but down from the 96.7 reported at the end of July.
The dollar had been higher heading into the report, helped by some encouraging details within the preliminary statistics on second-quarter US gross domestic product growth.
Earlier Friday, figures showing the preliminary US GDP was revised downward to 2.8 percent from the government's advance estimate of 3.0 percent did little to excite the market, but managed to push the dollar toward session highs versus the euro and Swiss franc.
"The headline may not be strong, but some of the details were a little stronger, especially with respect to consumption and spending," said Meg Browne, currency strategist at HSBC in New York.
Comments from Federal Reserve Chairman Alan Greenspan did little to stir markets, since he largely refrained from mentioning the economic outlook or monetary policy. Instead, Greenspan urged US policymakers to get an early start on containing the US budget deficits that are expected to balloon as baby boomers enter retirement, warning that delays will invite "abrupt and painful" shocks to the economy.
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