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Dollar extends gains after strong US data

Take out your dollar bull caps. The buck was jolted higher on Wednesday after a duo of economic reports handily beat Wall Street estimates.

The dollar index, a gauge of the currency against half a dozen peers, was up 0.5 per cent in recent trade, hitting highs for the day. The greenback was higher by 0.54 per cent on the yen to Y110.32, while the euro fell 0.55 per cent to $1.1906 and sterling dipped 0.26 per cent to $1.2885.

The second reading on gross domestic product showed that the world’s biggest developed economy grew at a more rapid than expected rate in the second quarter, while a survey on private payroll additions in the month of August handily exceeded forecasts.

The reaction was more muted in fixed income, with the policy-sensitive two-year Treasury note yield ticking up by 0.016 percentage point to 1.342 per cent.