* Dollar index near a six-month peak after another push
* U.S. Q2 GDP, Fed statement next in focus
By Ian Chua
SYDNEY, July 30 The U.S. dollar hovered at a
six-month peak against a basket of major currencies early on
Wednesday, having pushed higher as investors continued to give
the euro a wide berth.
Traders said there was no fundamental reason for the broad
strength in the greenback but suggested month-end repatriation
by U.S. corporates may have helped.
Dollar bulls are also holding out hope that U.S. second
quarter gross domestic product will show the economy has
rebounded from a very soft patch and that the Federal Reserve
will provide some hints on when it will raise interest rates.
The dollar index was last at 80.208, having risen 0.2
percent on Tuesday, a modest move but a vast improvement from
Monday's flat performance. It climbed as far as 81.245, a high
last seen in early February and is back in the 81.000/81.482
band that had capped it over the past nine months.
"The dollar managed to mark a number of notable, bullish
technical breaks versus its major counterparts despite the fact
that Wednesday's Q2 GDP release and FOMC rate decision are
likely to impact the greenback specifically - regardless of the
outcome," said John Kicklighter, chief currency strategist at
"Speculators' complacency and contentedness will be put to
The euro reached a fresh eight-month low of $1.3404,
bringing the November trough of $1.3295 in view.
Against the yen, the common currency held relatively steady
at 136.93, while the dollar popped above 102.00
for the first time in over three weeks.
Analysts polled by Reuters expect the U.S. economy to have
grown at an annualised rate of 3.0 percent in the second
quarter, turning around from a 2.9 percent contraction due in
part to a harsh winter.
Traders said anything less than 3 percent will be taken as a
negative and could send dollar bulls packing.
The Fed, meanwhile, is all but certain to cut its monthly
bond-buying programme by another $10 billion, but the focus has
already shifted to when it will start to lift interest rates.
This week's meeting, however, will conclude with only a
statement and none of the theatre associated with a news
conference, leaving markets to go through every sentence with a
fine-tooth comb for subtle changes.
To cap the week off is the closely watched nonfarm payrolls
report, which should show yet another month of healthy
The dollar also gained ground against its Canadian peer,
hitting a six-week high of C$1.0866, while sterling
fell to a six-week trough of $1.6933.
The New Zealand dollar was among the worst major performers
on Tuesday, having touched a seven-week low of $0.8495
after dairy giant Fonterra cut its forecast payout to
suppliers in the new season.
The kiwi last traded at $0.8510. It has fallen a steep 3.7
percent from the July 10 peak of $0.8839 as the country's
central bank jawboned the currency lower and paused its
tightening cycle after four straight interest rate hikes.
(Editing by Eric Meijer)