Investing.com – The dollar rose to two-week highs against a basket of the other major currencies on Thursday as risk appetite improved amid optimism on U.S. tax reforms and signs of ongoing strength in the labor market.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.16% to 93.68 by 08:49 AM ET (13:49 GMT), the most since November 22.
The dollar extended early gains against the yen, with USD/JPY rising 0.34% to 112.64, pulling away from the previous day’s low of 112.37.
The dollar fell against the safe haven yen on Wednesday after U.S. President Donald Trump recognized Jerusalem as the capital of Israel, despite warnings that it would inflame tensions in the Middle East.
Demand for the dollar remained supported by hopes that U.S. Congress will soon pass tax reform legislation that gives the economy a fiscal boost.
Senate Republicans agreed to talks with the House of Representatives on reconciling their separate versions of the legislation on Wednesday, fueling hopes that lawmakers will reach an agreement on a final bill ahead of a self-imposed December 22 deadline.
Data showing that U.S. jobless claims fell for a third straight week, pointing to tightening labor market conditions also provided support to the greenback.
The euro was near two-week lows against the firmer greenback, with EUR/USD last at 1.1788.
Sterling was little changed, with GBP/USD at 1.3384 after falling as low as 1.3387 earlier amid mounting concerns that a Brexit deal may not be reached ahead of next week’s European Union summit.
Elsewhere, the Canadian dollar remained on the back foot, with USD/CAD up 0.4% to 1.2839.
The loonie fell after the Bank of Canada kept interest rates on hold on Wednesday and reiterated that it would continue to remain cautious amid what it said was “considerable uncertainty” to the global outlook.
The Canadian dollar shrugged off data on Thursday showing that the value of Canadian building permits rose more than expected in October.
<r><r> Source : Investing.com