Dollar rises broadly on better-than-forecast US data
* U.S. GDP grows 1.7 percent in 2nd quarter, boosts dollar
* U.S. private sector added 200,000 jobs in July
The dollar rallied across the board on Wednesday as upbeat U.S. economic growth and private-sector jobs data cemented expectations that the Federal Reserve will scale back its asset buying plan this year.
The U.S. economy grew at a faster-than-expected clip of 1.7 percent in the second quarter, surpassing median forecasts for a rise of 1.0 percent. Also, the U.S. private sector added 200,000 jobs this month when the market was expecting 180,000.
"This obviously will increase the debate as to whether or not the Fed will begin trimming (bond purchases) sometime in September as opposed to the end of the year or the beginning of the first quarter of 2014," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "The debate is going to be in favor of those thinking of the September pullback."
Less stimulus for the economy could prod U.S. interest rates higher, making the dollar more attractive to investors. The U.S. currency rallied in May and June after Fed Chairman Ben Bernanke said on May 22 that the U.S. central bank could cut back on its bond purchases by September.
Bernanke backtracked a few weeks ago, saying that the Fed would still keep its stimulus program in place if U.S. growth stayed sluggish.
The dollar hit the day's highs of 98.52 against the yen and was last at 98.14 yen, up 0.2 percent. For July, the greenback posted losses of nearly 1.0 percent.
The euro fell to session lows of $1.3213 and last traded at $1.3220, down 0.3 percent. It posted monthly gains of 1.7 percent.
The dollar index rose 0.3 percent to 82.056. On the month, however, the dollar was down 1.2 percent, falling for a second consecutive month.