WASHINGTON (dpa-AFX) - The U.S. dollar gained significant ground against most major currencies and the dollar index hit a two-month high on Friday.
The dollar was driven largely by data showing the U.S. economy slowed at a less-than-expected pace in the second quarter of current fiscal and on reports the U.S. government will not intervene in the currency markets.
According to CNBC reports, White House economic adviser Larry Kudlow said the Trump administration has ruled out intervening in the currency markets.
The reports said White House trade adviser Peter Navarro presented Trump with ideas on how to devalue the dollar to gain an upper hand in the trade fight with China, but the president quickly dismissed the proposals.
Trump had tweeted earlier this month that Europe and China are keeping their currencies artificially low to boost exports.
Traders were looking ahead to the upcoming Federal Reserve's monetary policy meeting, due on July 30 & 31. It is widely expected that the central bank will announce a 25 basis points reduction in interest rate.
The dollar index, which rose to 98.09 from around 97.80, and was last seen hovering around 98.00, gaining about 0.2%.
Against the euro, the dollar strengthened to 1.1113 before paring some gains and drop down to 1.1128, still up in positive territory with a modest gain of 0.16%.
Against Pound Sterling, the dollar fared even better, moving on to $1.2376, from previous close of $1.2455. The sterling was last seen at $1.2388, down more than 0.5% from previous close.
The Japanese yen, which moved in a tight band against the dollar, was last seen at 108.65 a dollar, after having eased to 108.56 from an early high of 108.83.
Against the loonie, the dollar was up slightly at 1.3168.
Against the Aussie, the greenback gained 0.6% at 0.6910, while against Swiss franc, it was up 0.25%, at 0.9933.
Data from the Commerce Department showed U.S. economic growth slowed in the second quarter but still exceeded economist estimates.
The Commerce Department said real gross domestic product climbed by 2.1 percent in the second quarter following the 3.1 percent jump in the first quarter. Economists had expected the pace of GDP growth to slow to 1.9 percent.
The stronger than expected GDP growth reflected positive contributions from consumer spending, federal government spending, and state and local government spending.
Meanwhile, negative contributions from private inventory investment, exports, non-residential fixed investment and residential fixed investment limited the upside.
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