* Traders await Fed statement Wednesday
* U.S. GDP, jobs data also on calendar
* Dollar hits fresh 8-month highs against euro
* U.S. consumer confidence rises in July
(Updates prices, adds comments)
By Sam Forgione
NEW YORK, July 29 The U.S. dollar hit fresh
eight-month highs against the euro on Tuesday and advanced
against the yen and Swiss franc on expectations for positive
U.S. economic data and a potentially more hawkish tone from the
Analysts said the Fed, which is expected to cut its monthly
bond-buying program by another $10 billion after its two-day
meeting ends on Wednesday, may hint at an approaching hike in
interest rates in light of U.S. labor market growth.
"The market is starting to get more comfortable with the
idea that a shift in (the Fed's) tone is coming, and they're
positioning for it," said Ian Gordon, FX strategist at Bank of
America Merrill Lynch in New York.
He said, however, that Bank of America expects the central
bank to maintain a dovish stance given Fed officials' emphasis
on continued slack in the labor market. An eventual rate hike
would boost the dollar by attracting investment flows into the
United States, analysts have said.
Analysts said expectations for positive U.S. second-quarter
gross domestic product growth and July nonfarm payrolls data
supported the dollar. The GDP data, due Wednesday, is expected
to show a 3 percent advance after a 2.9 percent contraction in
the first quarter, according to a Reuters poll of economists.
Economists expect the Labor Department's nonfarm payrolls
report to show U.S. employers added 233,000 jobs in July, down
from 288,000 in June but still showing momentum in the U.S.
Conference Board data on Tuesday showed its index of U.S.
consumer confidence rose to 90.9 in July, beating economists'
expectations of 85.3 and marking its highest level since October
2007. That helped underpin the dollar's strength against major
"The overall picture is of a continuing U.S. recovery, and
the number this morning is in line with that," said Aroop
Chatterjee, currency strategist at Barclays in New York.
Analysts also said new European sanctions against Moscow,
which the European Union agreed to impose on Tuesday, weighed on
the euro given the potentially negative impact on trade ties
between Russia and Europe.
The euro was last down 0.22 percent against the U.S.
dollar at $1.3410, slightly above a fresh eight-month low of
The dollar was last up 0.27 percent against the Japanese yen
at 102.12, just under an earlier three-week high of
The dollar was up 0.32 percent against the Swiss franc
to trade at 0.9069 franc, just below an earlier
five-month high of 0.9074 franc.
The U.S. dollar index, which measures the dollar
against a basket of six major currencies, was last up 0.22
percent at 81.202.
The benchmark 10-year U.S. Treasury note yield
fell to 2.46 percent, from 2.49 percent late Monday.
(Reporting by Sam Forgione; Editing by Tom Brown and Nick