The dollar hit a six-week high on the yen and rose versus the euro and commodity currencies on Thursday as the market readied for US growth data due later which could raise expectations for higher interest rates.
The greenback also got a boost from a tumble in commodity currencies after Chinese Premier Wen Jiabao told Reuters the previous day the country needs "very forceful" measures to cool red-hot growth and reports on Thursday that authorities ordered some smaller Chinese banks to halt lending temporarily.
High-yielding currencies such as the Australian dollar took a hit from price falls in precious and base metals resulting from doubts about Chinese growth and even an interest rate hike did little to help the New Zealand dollar.
"There is concern China's economy has started to overheat but we don't think the economy is in for a hard landing. This China story is one trigger for the fall in commodity prices and currencies," said Mark McFarland, currency strategist at UBS.
"A strong GDP number will see majors come off against the dollar. It could even bring forward the expected time of a Fed rate hike. Markets are expecting a hike in September."
The dollar had risen to 110.81 yen from 110.06 in late New York on Wednesday, before trimming gains to 110.64 by 1130 GMT.
The greenback extended earlier gains against the Aussie and kiwi to its highest since November. In Europe the two high-yielders were down more than one percent at US $0.7132 per Aussie and US $0.6149 per kiwi.
The greenback stood at $1.1809 per euro, within a cent of five-month highs set earlier this week.
In an interview with Reuters on Wednesday, Wen said China needed to act forcefully to cool its economy, which grew 9.7 percent between the first quarters of 2003 and 2004, and protect itself against inflationary pressures.
Sources at several Chinese banks said they had received an order to stop lending for several days in what analysts said was the latest move to clamp down on easy credit to help moderate growth.
Dealers said expectations of an early US rate hike could be reinforced by Thursday's first-quarter US gross domestic product data, which is likely to show the economy growing at a five-percent annualised rate.
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