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• The dollar rose to its highest in more than a week against a basket of major currencies on Thursday, boosted by the Federal Reserve’s outlook for more rate hikes beyond this year as the euro weakened on worries about the Italian budget.

In afternoon trading, the dollar index rose 0.7 percent to 94.875 .DXY.

• Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington, said that while the Fed’s policy tightening bias is dollar-positive, the U.S. central bank’s forecast of low and stable inflation over coming years is likely to limit the dollar’s upside.

• The euro dropped 0.7 percent to $1.1653 EUR=, after hitting a session low of $1.1643, its weakest since Sept. 19, on a report by the Corriere della Serra that an Italian budget meeting was likely to be delayed. That spooked traders concerned that Italy's ruling parties will push for a bigger deficit target.

The euro fell further when a source in the prime minister’s office said Italy’s government has agreed to target next year’s budget deficit at 2.4 percent of gross domestic product.

• The U.S. economy grew as expected in the second quarter, according to a reading Thursday that confirmed that gross domestic product rose at its quickest rate in nearly four years.

GDP, the broadest measure of how the economy is progressing, increased 4.2 percent, the Commerce Department's Bureau of Economic Analysis reported, the same as expected from economists surveyed by Thomson Reuters. It was the fastest pace since the third quarter of 2014.

This was the final reading for the quarter and now sets the stage for Q3 and what is expected to be a year that will show growth better than 3 percent, which the Trump administration has set as its goal.

• New orders for key U.S.-made capital goods fell in August after four straight months of strong gains, while shipments barely rose, but that will probably not change expectations of solid growth in business spending on equipment in the third quarter.

The Commerce Department said on Thursday that orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, dropped 0.5 percent last month, pulled down by a decline in demand for computers and electronic products.

• As the world's two largest economies exchange tit-for-tat tariffs, there are growing suggestions that the trade turmoil has spilled over into military relations.

China has canceled friendly engagements with the U.S. Navy, possibly due to the trade dispute.

In an interview with CNBC's Morgan Brennan, Navy Secretary Richard Spencer, the branch's top civilian, explained the intricate relationship between the two naval forces.

Spencer's comments come on the heels of reports that China's top naval commander canceled a planned visit this week to meet with his American counterpart and that the U.S. was denied a port visit in Hong Kong for its USS Wasp amphibious ship.

• Federal Reserve Chairman Jerome Powell has a new message for financial markets: watch the data on jobs, wages and inflation for signals on monetary policy - not the U.S. central bank’s words or forecasts.

That’s a big change for the Fed, which for most of the past decade has done what it could to steer markets on its policy intentions as it nursed a fragile economy to recovery after the financial crisis.

The U.S. economy does not face a large chance of a recession in the next two years and the Federal Reserve plans to keep gradually raising interest rates, Fed Chairman Jerome Powell said on Thursday.

• In his prepared remarks at the third annual conference of the European Systemic Risk Board, Mario Draghi, President of the ECB and Chair of the ESRB, didn't comment on the near-term monetary policy outlook and rather talked about the use of macroprudential tools to address financial risks and vulnerabilities.

"The EU economy has been growing now for more than five years. By ensuring price stability, monetary policy contributes to this growth being sustainable. But there is also an important contribution to be made by macroprudential policy. By applying appropriate tools in a timely fashion, policymakers can help prevent the incipient build-up of financial imbalances," Draghi said.

• Bank of Japan policymakers debated in September the potential of making further tweaks to their massive stimulus program with one seeing room to make monetary policy more flexible, a summary of opinions at this month’s rate review showed on Friday.

• The Bank of Canada will continue to raise interest rates gradually, Governor Stephen Poloz said on Thursday, stressing that despite economic uncertainties, the bank did not want to let inflation momentum build.

The central bank has raised rates four times since July 2017 and most market players expect another hike on Oct. 24. Poloz said that while the bank did not know exactly where the economy was heading, that did not justify inaction.

“It does not mean keeping interest rates on hold until inflation momentum starts to build,” he said in a speech in Moncton, New Brunswick.

• Canada on Thursday shrugged off U.S. President Donald Trump’s criticism that talks to modernize NAFTA were moving too slowly and made clear it had to keep negotiating as long as there was a chance of success.

• One in five British companies would move at least some of their operations to the European Union in the event of a “no-deal” Brexit, according to a survey on Friday.

A similar proportion said they would cut investment and jobs, the British Chambers of Commerce (BCC) said.

“Our evidence is clear - failure to reach a political agreement would have real-world consequences, with significant decreases in both investment and recruitment,” BCC Director General Adam Marshall said.

“Government must act urgently and decisively to get a comprehensive deal done.”

• British consumers lost some of their confidence in early September — before Prime Minister Theresa May’s latest setback on Brexit — but companies were more upbeat, two surveys showed on Friday.

• Oil edged higher on Thursday, driven by the prospect of a shortfall in global supply once U.S. sanctions against major crude exporter Iran come into force in five weeks.

• Analysts said that OPEC and Russia appear unlikely to immediately boost production as Trump has demanded. U.S Energy Secretary Rick Perry has ruled out using U.S. strategic crude reserves to lower oil prices.

- The most-active December Brent crude futures contract LCOv1 settled up 59 cents at $81.38 a barrel, below the session high of $81.90 but still within sight of Tuesday’s four-year high of $82.55.

The front-month November contract expires on Friday.

U.S futures CLc1 settled up 55 cents at $72.12 a barrel.

Reference: Reuters, FXStreet, CNBC