Dollar recovers in London trade

The dollar inched higher against the euro on Thursday, as players squared positions after a steep fall in the previous session on data showing a record US current account deficit. The dollar rose modestly as investors took profits in high-yielding currencies, particularly in emerging markets, ahead of an expected rise in US interest rates next week, some analysts said. Investors were also squaring positions ahead of US data due later in the session.
"We're in a stabilisation phase at the moment. Increasing numbers of people are taking profits and moving to the sidelines," said David Mann, foreign exchange strategist at Standard Chartered Bank.
"But there are still some big vulnerabilities out there and it's the ultimate fundamentals that will hold."
The dollar shrugged off a backdrop of usually negative factors including record high oil prices and falls in global stocks following a profit warning by General Motors as well as the deficit.
The US Federal Reserve is expected to raise rates by a quarter percent to 2.75 percent on Tuesday. An increase would further widen the gap with the eurozone where rates stand at 2.0 percent.
By 1300 GMT, the dollar was up a quarter of a percent to trade around $1.3390, moving away from Wednesday's low of $1.3438.
Against the yen the dollar was also slightly higher at 104.35 but within recent ranges.
The Swiss Franc was a touch lower against the dollar at 1.1536 francs after the Swiss National Bank kept interest rates on hold, as expected.
US weekly jobless claims for the week ended March 12 are due at 1330 GMT and the Philadelphia Federal Reserve releases its survey of manufacturing activity for March at 1700 GMT.
"After the abrupt sell-off yesterday, the market is taking stock and US data is expected to be reasonable," said Tom Vosa, head of market economics at National Australia Bank.
The dollar gained despite a raft of potentially negative factors.
Oil prices hit an all-time peak of above $57 a barrel due to lingering supply concerns, raising fears that the US current account deficit could widen further as import prices soar.