The dollar climbed on Thursday as solid US data reinforced a theme of robust US economic growth, while the euro fell after European Central Bank chief Mario Draghi alluded to sagging inflation and the need for further monetary policy assistance.
The euro fell below $1.06 to its lows of the day as Draghi spoke at a news conference, while the dollar index, which tracks the greenback against the euro and five other major currencies, added to its gains.
The ECB announced it would maintain its negative interest rate policy and maintain a record pace of asset purchases to stimulate tepid growth.
Draghi described the current euro zone recovery as "dampened by the sluggish pace of structural reform" and said a "very substantial degree" of monetary policy stimulus was still needed.
That helped the dollar add to Wednesday's gains that followed remarks from Federal Reserve Chair Janet Yellen who said a "few" increases in U.S interest rates could be appropriate this year.
The greenback gained as much as 1 percent on Wednesday after Yellen's speech, which turned investors back to the narrative of strong growth and rising inflation in the US that drove the currency higher.
"Clearly there's policy divergence between the two central banks," said Peter Ng, senior FX trader at Silicon Valley Bank in Santa Clara, California. "Just based on the fundamentals, things are looking good in the US You've got firmer rates, strong labour market and the yield differential supports US assets."
The euro fell to a session low of $1.0590 against the dollar and to a 10-day low of 86.11 pence against sterling.
The dollar rose to a nearly one-week high against the yen as investors laid bets on further dollar strength. The greenback moved to 115.29 yen, its highest since January 13.
The dollar also booked gains against the Swiss franc, rising to 1.0115 franc.
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