The dollar rebounded from a seven-week low on Thursday, as investor appetite improved with higher global bond yields and stable stock markets around the world, a day after the Dow Jones Industrial Average topped the 20,000 mark for the first time.
In late morning trade, the Dow held above 20,000 points and the other main US stock indexes posted minor gains. "The impression ... is that the Trump reflation trade may be getting back on track," said Shaun Osborne, chief FX strategist, at Scotiabank in Toronto. "The US dollar is benefiting as key short-term yield spreads turn slightly more supportive."
Speculators have gradually cut their net bets on a stronger dollar to $24.44 billion in the week to January 17 from $25.43 billion the week ending January 3, data from the Commodity Futures Trading Commission and calculations by Reuters show.
In late morning trading, the dollar index was up 0.4 percent at 100.47, having hit a seven-week low of 99.793 in Asian trading.
The dollar gained nearly 1 percent against the yen to 114.39 yen, while the euro fell 0.5 percent versus the greenback to $1.0685.
The dollar trimmed gains against both the yen and euro after a weak set of US economic data, including an increase in initial jobless claims and a fall in new home sales.