The dollar eased on Thursday as forex investors squared positions before the annual global central bankers' gathering in Jackson Hole, Wyoming, where Federal Reserve Chair Janet Yellen is expected to speak today and may provide new guidance on US monetary policy.
Recent hawkish statements on the US economy by Fed officials including Vice Chairman Stanley Fischer and New York Fed President William Dudley have prompted investors to raise bets the Fed will probably raise rates sooner rather than later. Some market participants believe Yellen could echo their signals.
Data on Thursday fuelled the hawkish speculation on interest rates, with a 1.6 percent rise in durable goods orders in the US in July and a fall in initial weekly jobless claims.
Gold slipped lower and hit four-week lows following the data as speculative investors may have abandoned their long gold positions on concerns that Yellen may signal a firm commitment to hike rates this year. Spot gold fell to $1'318 at a point yesterday.
EUR/USD traded in a tight range, dropping to 1.1259 but closed above 1.1280 despite sluggish German IFO surveys which showed business sentiment soured in Europe's largest economy.
