The dollar eked out a modest rise on Thursday for its fifth straight day of gains, the longest in almost a year, although it came off highs in late trading after weak US economic data. The dollar's strength this week has come as investors have priced in the possibility of two US interest-rate hikes this year from the Federal Reserve.
St Louis Fed President James Bullard said Thursday in prepared remarks that another US interest rate hike "may not be far off." Bullard's comments followed similar remarks Wednesday in which he said that a rate hike could come as soon as next month. That was in line with similarly hawkish comments from other US policymakers earlier in the week.
"Hawkish Fed talk this week has caught a market that has largely underestimated the risk of US rate rises, while lighter, pre-holiday trade seems to be enhancing the dollar's resurgence," said Western Union Business Solutions senior market analyst Joe Manimbo. US financial markets will be closed for the Good Friday holiday.
The dollar turned flat in afternoon US trading on "pre-holiday positioning" and after data showed a fall in US durable goods orders and a slight uptick in the number of Americans filing for unemployment benefits, Manimbo said. Earlier, the greenback hit an eight-day high of 96.364.
The dollar index was last at 96.133. It has risen for five days straight and is up just over 1 percent this week. Against the yen, the dollar posted its largest one-day percentage gain in nearly two weeks, rising 0.4 percent against the Japanese currency. The euro hit an eight-day low of $1.1144, having lost nearly 1 percent so far this week, with attacks in Brussels on Tuesday bruising sentiment.
It was last down 0.1 percent at $1.1155. Sterling rose against the dollar for the first time this week, as the pound benefited from UK retail sales numbers that exceeded expectations. The dollar gained more than 2 percent against the pound this week as the odds of a British exit from the EU have increased in the wake of the attacks in Brussels. The attacks in Belgium were seen as exacerbating the possibility of Britain leaving the European Union, further undermining both the euro and the pound. Sterling was last up 0.3 percent to $1.4112.
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