(Updates to North American trading, latest prices, quotes and
changes byline and dateline; previous LONDON)
* Dollar gains on Fed rate hopes, data
* U.S. Treasury yields up
* Dollar pushes commodities to near six-year lows
By Michael Connor
NEW YORK, July 30 (Reuters) - The dollar traded near weekly
highs and U.S. Treasury yields rose on Thursday as U.S. gross
domestic product data showed a pick-up in consumer spending and
encouraged bets that hikes in U.S. interest rates will start as
soon as September.
Wall Street was off on disappointment that GDP data was
slightly below forecasts, while oil prices shrugged off an
earlier drag from the dollar's gains and edged ahead on an
unexpectedly big drop in U.S. oil inventories.
The euro fell 0.55 percent against the dollar to $1.0924,
which helped the dollar index .DXY rise 0.55 percent at 97.511
after touching 97.591, its highest so far this week.
"The latest GDP report confirms the Fed's narrative that the
first-quarter weakness was transitory. The bar for them to
hiking rates is not very high," said Ian Gordon, G10 currency
strategist at Bank of America Merrill Lynch (NYSE:BAC) in New York
Data on Thursday showed economic growth in the United States
accelerated in the second quarter, backed by solid consumer
demand, to a 2.3 percent annual rate. While slightly below
economists' expectations for 2.6 percent growth, the data still
pointed to firming domestic fundamentals. ID:nLNNUIEBDP
The U.S. Federal Reserve on Wednesday described the economy
as expanding "moderately," with improvements in housing and the
labor market. That left the door open for a possible hike in
interest rates in September, which would be the first rise since
2006.
Treasury prices, which move in the opposite direction of
yields, were mostly off. Benchmark 10-year Treasuries
US10YT=RR were down 2/32 of a point in price, pushing the
yield to 2.2679 percent.
The Dow Jones industrial average .DJI fell 74.99 points,
or 0.42 percent, to 17,676.4, the S&P 500 .SPX declined 8.97
points, or 0.43 percent, to 2,099.6 and the Nasdaq Composite
.IXIC eased 25.61 points, or 0.5 percent, to 5,086.12.
Nine of the 10 major S&P sectors fell, with the consumer
staples index's .SPLRCS 0.61 percent fall leading decliners.
Europe's main stock markets 0#.INDEXE held on to a third
day of modest gains as results from Siemens SIEGn.DE , Nokia
NOK1V.HE and Deutsche Bank DBKGn.DE and a rise in euro
zone-wide sentiment data boosted the mood. ECONG7 .EU
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets in 2015 http://link.reuters.com/dub25t
European bourses in 2015 http://link.reuters.com/pap87v
Currencies vs dollar http://link.reuters.com/tak27s
World interest rates: http://link.reuters.com/xyb96s
Oil prices http://link.reuters.com/beb23v
Commodities performance http://link.reuters.com/rac73w
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
With the dollar flexing its muscles again, commodity markets
were back under pressure, with copper CMCU3 , considered a
bellwether for global economic activity, trading near a six-year
low at $5,268 a tonne. MET/L
The broad Thomson Reuters CRB commodities index .TRJCRB
hit a fresh six-year low before recovering some ground. Gold was
flirting with a 5-1/2-year low at $1,093 an ounce as its appeal
ahead of potentially higher global interest rates remained in
question.
Oil prices, smarting from rising U.S. shale oil output and
an easing of sanctions on Iran, were faring slightly better,
having bounced on Wednesday following an unexpectedly large
weekly drawdown in U.S. crude inventories. O/R
Front-month Brent crude futures LCOc1 were pegged up 1
percent at $53.90 a barrel, and U.S. crude was up to $49.18
having pulled away from Tuesday's 4-1/2-month low. They have
both lost more than 15 percent in July.