Bullish Economic Data and Hawkish Fed-Speak Keeps U.S. Dollar Buoyant

The U.S. dollar strengthened again on Thursday on the heels of bullish economic data, and promising news regarding pro-growth tax reform in the U.S. Record highs on Wall Street accompanied by higher Treasury yields helped elevate the USD/JPY pair through the 50- and 100-hour moving averages to just shy of 113.00. But with resistance building at 112.90, the dollar could not mount a convincing breach and closed only fractionally higher at 112.85.

EUR/USD turned lower during European trade as the stalemate between Spanish government officials and Catalonian separatists leaves the country in the midst of a constitutional crisis. Hawkish remarks from Fed officials John Williams of the San Francisco Fed and Patrick Harker of Philadelphia maintained the dollar’s uptrade against the yen when both indicated a December rate hike was still on the table. EUR/USD bottomed out at 1.1700 after breaching support at the 50- and 100-hour moving averages at the N.Y. open. The euro closed out the North American session 0.50% lower at 1.1704.

Cable limped into the close as concerns about UK Prime Minister Theresa May’s future weighed on the British currency. Although May squashed debate about her resignation, the chatter served as a headwind to the pound, driving it below its 50-day moving average for the first time in a month. GBP/USD lost more than 1.0% in value from Wednesday’s North American close, last trading at 1.3111.

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