During the New York session, the greenback not only pared all of its losses, but also rose to a fresh high. Despite mixed macroeconomic statistics, the dollar index approached the 2-year high and paused near the level of 96. According to analysts, the upward rally in the US currency was sparked by Chicago Fed President Charles Evan's remarks. He reiterated that the Federal Reserve would increase interest rates twice before the end of the year, in September and December. Investors are buying the US dollar as the upcoming US inflation report is expected to show a steady broad increase in consumer prices. However, the greenback still lacks momentum against safe haven currencies. Thus, the USD/JPY pair is hovering below the 111.00 level. An escalating trade conflict between the US and China still keeps investors from buying the buck.
Meanwhile, Japan unveiled its preliminary GDP growth data, with the annual figure coming in at 1.9%, up from the predictions of economists for a 1.4% rise. On a quarterly basis, the Japanese economy unexpectedly expanded by 0.5% after a 0.2% decline earlier. In the meantime, assets during the Asia-Pacific session have been weighed down by the world's dominant currency as well. Thus, the New Zealand dollar has extended its downtrend nearing the 2-year low, while the Australian dollar is set to lose more than 1%. Economists anticipate the Aussie to continue its decline as the Reserve Bank of Australia noted a positive effect of the national currency's low exchange rate on Australia's inflation. This, in turn, could result in a faster than expected interest rate hike. Traders pay attention to the UK, as the direction of the British pound's trading depends on some important macroeconomic data scheduled to be released today.