U.S. Dollar Spikes Up As Strong GDP Data Raises Fed Rate Hike Prospects

The U.S. dollar was higher against its major counterparts in the New York session on Thursday, as the nation's economic activity unexpectedly jumped more than previously estimated in the third quarter, bolstering the case for further monetary tightening from the Federal Reserve in the coming months.

Revised data from the Commerce Department showed that the surge in real gross domestic product in the third quarter was upwardly revised to 3.2 percent from the previously reported 2.9 percent. Economists had expected the pace of GDP growth to be unrevised.

Data from the Labor Department showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended December 17th.

The report said initial jobless claims crept up to 216,000, an increase of 2,000 from the previous week's revised level of 214,000.

Economists had expected jobless claims to rise to 222,000 from the 211,000 originally reported for the previous week.

The USD/JPY pair rose to a 2-day high of 132.72. The greenback is seen finding resistance around the 137.00 mark.

The greenback appreciated to 1.2021 against the pound, a level unseen this month. Next key resistance for the greenback is likely seen around the 1.15 level.

The greenback recovered to 1.0603 against the euro, from a 2-day low of 1.0659 set at 3:25 am ET. The greenback is likely to face resistance around the 1.035 region, if it gains again.

The USD/CHF pair climbed to a 2-day high of 0.9296, from an 8-day low of 0.9227 seen at 3:20 am ET. The greenback is poised to challenge resistance around the 0.95 mark.

The USD/CAD pair reached a 2-day high of 1.3641, recovering from a 1-week low of 1.3571 it logged at 2:45 am ET. Should the greenback strengthens further, it is likely to test resistance around the 1.41 region.

The greenback jumped to 0.6244 against the kiwi, setting a fresh 3-week high. Further uptrend may take the greenback to a resistance around the 0.60 area.

The greenback rebounded to 0.6680 against the aussie, after hitting a 1-week low of 0.6767 in the previous session. Continuation of the greenback's uptrend may lead it to a resistance around the 0.64 region.