The dollar gained against the safe-haven yen and Swiss franc on Wednesday, as risk appetite rose on reports of a possible treatment for the new coronavirus out of China that has gripped the world and caused major disruptions among global businesses.
The US currency also benefited from a private-sector payrolls report for January that surpassed market expectations, suggesting the world's largest economy was on a stable growth path and interest rate cuts were off the table for now.
The focus, though, remained on the coronavirus, which has claimed 490 lives, most in and around the locked-down central city of Wuhan, where the new virus emerged late last year.
There have been two deaths outside mainland China: in the Philippines and Hong Kong, both following visits to Wuhan.
But the yen and Swiss franc fell after media reported a Chinese university had found a drug to treat people with the virus, while researchers in Britain had made a "significant breakthrough" in finding a vaccine.
"The market is starting to brush off the coronavirus," said Erik Nelson, currency strategist, at Wells Fargo Securities in New York. "What's driving this are some of the headlines on possible vaccines. So there is some optimism about having potentially a way to treat the symptoms from having the coronavirus."
Risk sentiment also improved after US private-sector payrolls increased by 291,000 in January, according to the ADP National Employment Report, far above expectations of an increase of 156,000 jobs. January's job gains were the largest since May 2015.
In late morning trading, the dollar rose 0.2% against the yen to 109.71 yen, after earlier rising to a two-week high of 109.84 yen.
It also rose 0.4% versus the Swiss franc to 0.9727 franc.
The euro, meanwhile, fell 0.4% to $1.1003, pushing the dollar index up 0.3% at 98.264.
The Australian dollar, a barometer of risk appetite towards China given its close economic ties with Beijing, was also well-bid, up 0.2% versus the dollar at US$0.6754. The Chinese currency in the offshore market also rebounded 0.3% against the dollar, which fell to 6.973 yuan.