Investing.com - The dollar extended gains against against the other major currencies on Thursday, after data showed that the U.S. economy grew more than initially estimated in the second quarter, boosting optimism over the health of the economy.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.39% at 95.68, the highest level since August 21.
The dollar extended gains against the yen, with USD/JPY up 0.46% to 120.47.
The Commerce Department reported on Thursday that U.S. gross domestic product grew at an annual rate of 3.7% in the three months ending June 30, above expectations for growth of 3.2%.
Preliminary data initially pegged U.S. growth at 2.3% in the second quarter. The U.S. economy expanded 0.6% in the previous quarter.
Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending August 22 declined by 6,000 to 271,000 from the previous week’s total of 277,000.
Analysts had expected initial jobless claims to fall by 3,000 to 274,000 last week.
The data came a day after New York Federal Reserve President William Dudley said Wednesday that the case for a September rate hike was “less compelling”, given the threat posed to the U.S. economy from recent turmoil in markets.
Meanwhile, investors continued to monitor developments in China. Shares in Shanghai rallied around 5% by the close of trading on Thursday, snapping six days of heavy losses.
Recent steep declines in Chinese equity markets have sparked fears that they will hasten an economic downturn and undermined investor confidence in the government’s ability to revitalize economic growth.
The dollar also pushed higher against the euro, with EUR/USD declining 0.55% to 1.1253.
The single currency came under broad selling pressure on Wednesday after the European Central Bank warned that the risk to its medium-term inflation target has increased and it is prepared to expand its economic stimulus program if necessary.
The single currency rose to seven-month highs earlier in the week as investors fled to the relative safe-haven currencies amid intense volatility in markets.
The dollar turned higher against the pound, with GBP/USD down 0.23% at 1.5425 and with USD/CHF advancing 0.43% to 0.9586.
The Australian and New Zealand dollars trimmed gains, with AUD/USD still up 0.16% at 0.7130 and with NZD/USD adding 0.12% to 0.6445.
Meanwhile, USD/CAD was down 0.38% to 1.3243.