* U.S. third-quarter GDP growth revised higher
* Pound hovers around $1.29 after Conservative lead dwindles (Recasts throughout, updates rates, adds comments post-U.S. market open; new byline, changes dateline; previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, Nov 27 (Reuters) - The dollar rose on Wednesday helped by upbeat U.S. data even as continued uncertainty about the outlook for a preliminary U.S.-China trade agreement and a shortened holiday week in the United States kept currency moves muted.
U.S. economic growth picked up slightly in the third quarter, rather than slowing as initially reported, amid a stronger pace of inventory accumulation and a less steep decline in business investment.
Separately, data showed new orders for key U.S.-made capital goods increased by the most in nine months in October and shipments rebounded.
“The dollar is definitely supported by the data,” said Alfonso Esparza, senior currency analyst at OANDA in Toronto.
“The Fed has signaled that is done for the year and good data validates that thinking,” he said.
The U.S. Federal Reserve has cut rates three times this year and signaled its rate-cut cycle might be at a pause. A show of strength in U.S. economy is giving traders confidence the central bank will keep borrowing costs where they are for now.
“The other thing is that this is basically the end of the week for U.S. markets and no one wants short dollar exposure going into the Thanksgiving weekend,” Esparza said.
The dollar index, which compares the greenback against six other major currencies, was up 0.17% at 98.415.
The index pared gains after data showed, excluding volatile food and energy components, that the personal consumption expenditures (PCE) price index edged up 0.1% last month after being unchanged in September.
“A 0.1% m/m rise in the core PCE deflator left the Fed’s preferred core inflation rate at a well below-target 1.6%. That underlines that interest rates are unlikely to be raised again for the foreseeable future,” said Andrew Hunter, senior U.S. economist at Capital Economics.
While recent reports that the United States and China are close to agreement on the first phase of a trade deal have helped support risk sentiment, there remains much uncertainty about the outlook for the trade talks.
Lingering trade tensions have generally been supportive of the greenback as investors view the United States as relatively well-positioned to weather a full-blown trade war should there be one.
The yen, usually bought when investors turn nervous, has faltered in recent sessions as equity markets soared. On Wednesday, the dollar gained 0.31% to 109.37 yen.
Sterling was little-changed on the day, recovering from early losses following the third consecutive poll showing a dwindling Conservative lead before Britain’s Dec. 12 general election.
Investors will be watching for the release of the YouGov seat-by-seat predictions of the election outcome at 5 p.m. EST (2200 GMT). The multilevel regression and post-stratification model accurately predicted the 2017 hung parliament, so it will be closely watched.
Editing by William Maclean, Ken Ferris and Tom Brown