By Ira Iosebashvili

The dollar rallied against its peers Wednesday, lifted by solid economic data from the U.S.

The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently up 0.6% at 91.88 as the dollar touched an eight-month high against the Japanese yen and gained against the euro.

Americans' incomes and household spending advanced at a solid pace for the second straight month in October, data showed Wednesday, suggesting that consumers can support economic growth in the year's final months.

A separate report released Wednesday showed that private-sector hiring continued at a strong pace in November, offering more evidence of a robust economy.

The strong data has bolstered the case for the Federal Reserve to take a more hawkish view on monetary policy in coming months. Higher rates tend to benefit the dollar, as they make the currency more attractive to investors seeking yield.

"The data this morning was certainly good," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange. "These are the types of figures that lead you to believe that the Fed may be inclined to raise rates at a faster pace in 2017."

Federal-funds futures, used to bet on central-bank policy, on Wednesday showed that investors assigned a 98.6% likelihood of a rate increase at the Federal Reserve's meeting in December. The chances for a follow-up increase in March stood at 13.1%, compared with 12.2% a day ago.

Investors are awaiting more U.S. data releases this week, including manufacturing numbers on Thursday and Friday's nonfarm payrolls report for November.

The dollar was up 1.6% against the yen at Yen114.18. It climbed as high as Yen114.54 earlier in the session, the highest level since March.

The euro was down 0.5% at $1.0596.

Reports that OPEC has reached a deal to cut production boosted oil prices and sent the currencies of oil-producing countries higher.

The dollar was down 1.7% against the Russian ruble to 64.02. It fell 0.6% against the Mexican peso to 20.49, and lost 0.2% against the Norwegian krone to 8.51.

Write to Ira Iosebashvili at

(END) Dow Jones Newswires

November 30, 2016 15:09 ET (20:09 GMT)

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