* U.S. second-quarter GDP data beats expectations
* U.S. ADP jobs report weaker-than-expected
* Optimism remains for strong U.S. non-farm payrolls
* Traders eye upcoming Fed statement
(Updates prices, adds comments; changes byline, dateline,
By Sam Forgione
NEW YORK, July 30 The U.S. dollar hit over
10-month highs against a basket of major currencies on Wednesday
after stronger-than-expected U.S. gross domestic product data
bolstered expectations for a more hawkish Federal Reserve.
U.S. GDP expanded at a 4.0 percent annual rate after
shrinking at a revised 2.1 percent pace in the first quarter,
the Commerce Department said Wednesday. Economists polled by
Reuters had forecast a 3.0 percent growth rate in the second
quarter after a previously reported 2.9 percent contraction.
"The risks are certainly there that the Fed becomes more
hawkish, since the rebound in GDP was pretty substantial," said
Brian Daingerfield, currency strategist at the Royal Bank of
Scotland in Stamford, Connecticut.
The Fed is scheduled to release a statement at 2 p.m. EDT
(1800 GMT) following the central bank's two-day policy meeting.
The Fed is expected to cut its monthly bond-buying program by
another $10 billion, and traders are watching closely for signs
of an eventual hike in rates from rock-bottom levels.
Analysts said that, since the Fed will not be updating its
economic forecasts and Chair Janet Yellen will not hold a news
conference Wednesday, the upbeat GDP data would likely have a
greater impact on the Fed's stance on monetary policy at its
next policy meeting in September.
The strong GDP data overshadowed weaker-than-expected
private-sector jobs data. The ADP National Employment Report
showed U.S. companies hired 218,000 workers in July, below
economists' expectations for a gain of 230,000 jobs, according
to a Reuters poll.
Analysts said expectations were still optimistic for
Friday's July non-farm payrolls growth. Economists expect U.S.
employers to have added 233,000 jobs in July, according to a
"There may be enough hiring in the state and local level to
bring non-farm payrolls up to the optimistic consensus or maybe
slightly higher," said Thierry Albert Wizman, global interest
rates and currencies strategist at Macquarie Ltd in New York.
The U.S. dollar index, which measures the dollar
against a basket of six major currencies, was last up 0.3
percent at 81.459, just under a 10-1/2-month high of 81.493
touched earlier in the session.
The euro was last down 0.25 percent against the
dollar at $1.3375, just under a fresh eight-month low of $1.3371
hit earlier in the session. The dollar was last up 0.51 percent
against the yen at 102.64 after hitting a two-month high
The dollar was up 0.31 percent against the Swiss franc at
0.9097 franc after hitting a six-month high of 0.9102
franc. U.S. government bond yields rose, with the benchmark
10-year note yield at 2.52 percent, from 2.46
percent late Tuesday.
(Reporting by Sam Forgione; Editing by Tom Brown)