US dollar soars on rate-hike expectation

New York, July 31 (IANS) The US dollar rose against other major currencies as robust economic data from the country bolstered market expectation for an interest-rate hike by the year-end.

The commerce department reported on Thursday that the US economy expanded at an annual rate of 2.3 percent in the second quarter, a moderate bounce from the revised 0.6 percent increase in the first quarter, Xinhua news agency reported.

Though the latest reading was below market consensus of a 2.5 percent gain, it still pointed to a sound recovery of US economy from the first quarter weakness.

The central bank said that the US economy was expanding “moderately”, with additional improvements in housing and the labour market.

Analysts said the Fed had upgraded its assessments of economic performance, supporting the popular view that the first rate-hike since 2006 may occur later this year.

The dollar index, which measures the greenback against six major currencies, was up 0.59 percent at 97.549 in late trading.

In late New York trading, the euro declined to $1.0921 from $1.1006 in the previous session, and the British pound dropped to $1.5600 from $1.5610 in the previous session.

The Australian dollar decreased to $0.7286 from $0.7298.

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