CURRENCIES: Dollar Rises, Aims For Its First Monthly Gain Since February

Euro falls after report says ECB is worried about the currency's rally

The dollar on Thursday stepped higher against most major rivals, remaining on course for a small gain for August -- its first monthly advance since February.

Analysts are attributing the buck's rally to upbeat U.S. economic data this week, and they're predicting more strength as other economic releases arrive.

The ICE U.S. Dollar Index -- which measures the currency against a half-dozen rivals -- rose to 93.1350, up from 92.8860 late Wednesday in New York.

"The greenback continues its recovery from oversold levels, and it's clear that the market is only looking at U.S. data now to boost the case for further short covering," said Boris Schlossberg, managing director of FX strategy at BK Asset Management, in a note Thursday.

With one trading day left in August, ICE's dollar gauge is up 0.3% for the month. It remains down for the year, with a loss of about 9%, but it has stabilized as analysts have suggested the buck's 2017 retreat has become overdone (http://www.marketwatch.com/story/why-the-beat-up-dollar-is-poised-for-a-rip-your-face-off-rally-2017-08-04).

The euro fell to $1.1860, down from $1.1884 late Wednesday. Analysts blamed the slide on a Reuters report (http://uk.reuters.com/article/us-ecb-policy-idUKKCN1BB15J) saying a growing number of European Central Bank policymakers are worried about the shared currency's advance against the dollar, raising the chance the ECB's asset purchases will be phased out only slowly. That report, which cited anonymous sources, appeared to outweigh a higher-than-expected reading on inflation in the eurozone (http://www.marketwatch.com/story/eurozone-inflation-beats-forecasts-2017-08-31-54854654).

The euro still is up a lot for the year, with a gain of 13% against the dollar.

American data dump: Traders on Thursday are waiting for a report covering U.S. personal income, consumer spending and core inflation, as well as fresh data on jobless claims, the housing market and the Chicago area's business conditions.

"If today's econ data dump provides further evidence of steady-to-improving U.S. fundamentals, then the dollar rally should continue into the North American close," Schlossberg said.

The July report on personal income, consumer spending and core inflation is due to hit at 8:30 a.m. Eastern Time, with economists polled by MarketWatch forecasting growth of 0.4% for both income and outlays, plus a 0.1% rise for inflation.

At that same time, a release on weekly jobless claims is expected to show 235,000 claims.

At 9:45 a.m. Eastern, investors are slated to get an August reading on business conditions in the Chicago area, then July pending home sales are set to arrive at 10 a.m.

Friday's monthly U.S. jobs report also looks set to be a big catalyst for the buck.

See:August jobs data is crucial test for U.S. dollar (http://www.marketwatch.com/story/august-jobs-data-marks-crucial-test-for-us-dollar-2017-08-30)

Other key FX pairs: In other currencies trading on Thursday, the dollar rose to Yen110.58 against the Japanese yen , up from Yen110.24 late Wednesday, while the British pound changed hands at $1.2873, down from Wednesday's 1.2925.

(END) Dow Jones Newswires

August 31, 2017 07:05 ET (11:05 GMT)