Dollar trades near one-month high after buoyant US durable goods

The dollar traded near its highest level in a month against a basket of major currencies on Friday, set for its second weekly gain, after a report showing U.S. durable goods advanced in June.

The report showed durable goods soared 0.7 percent last month from the prior 1.0 percent drop recorded in May, compared with analysts’ forecast of 0.5 percent increase.  

U.S. initial jobless claims fell to the lowest level in nearly 8-1/2 years last week, before next week’s nonfarm payrolls report.

Inflation data released this week signaled a 0.4 percent increase in June, following a 0.3 percent advance in May.

The improvement in U.S. data is adding to the case the Fed may raise the borrowing cost earlier than predicted, especially after Fed Chair Janet Yellen mentioned last week interest rates could rise earlier than market anticipation if both inflation and labor market data showed remarkable progress.

The dollar index, which tracks the green currency’s movements versus six major currencies, climbed to a peak of 81.09 after hitting a low of 80.89.  

The EURUSD resumed its drop after a downbeat German report, which signaled business confidence retreated for a third straight month in July.

The pair is meanwhile trading around 1.3435 after hitting a high of 1.3474 and a low of 1.3431.

The GBPUSD resumed its drop for an eighth consecutive session despite a report showing Britain returned to pre-crisis peak after it grew 0.8 percent in the second quarter.

Investors deemed that the rally is over after touching a peak of 1.7188 on July 25, where the pair dropped to a low of 1.6959, following the fall below the physiological level of 1.7000.

The USDJPY rose for a sixth straight session to trade around 101.88, compared with the session’s opening of 101.78.