NEW YORK: The dollar advanced against the euro Wednesday after a US Federal Reserve report said economic activity continued to pick up steam across the world's largest economy.
The Fed's Beige Book report said seven of the 12 regions surveyed recorded only "modest" growth, while five notched "moderate" growth. Most of the districts were hopeful about growth.
The report, covering a six-week period ending July 7, is the second Beige Book in a row to find growth across the country and is the latest evidence the US economy is picking up steam after unusually cold weather depressed activity in the first quarter.
Gains in the dollar were supported by the "optimistic" Fed report, said BK Asset Management analyst Kathy Lien.
But citing disappointing reports in Britain and the eurozone, Lien said the dollar's strength "had less to do with the market's optimism about the US economy and more to do with weaker economic data abroad."
Omer Esiner, chief market analyst at Commonwealth Foreign Exchange, said the dollar also benefited from earlier comments from Fed Chair Janet Yellen that "were not quite as dovish as many had expected."
In a hearing Tuesay, Yellen said the Fed could raise benchmark rates sooner than expected if labor markets improve rapidly.
"As a result, market focus remains squarely on upcoming US economic reports for direction," Esiner said.
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