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The euro and the yen rose on Thursday, reversing a wave of recent losses incurred by the two currencies against the dollar, and the Swiss franc reached a one-month high against the euro after inflation in Switzerland climbed to a 14-year high.
In Asian trading, the dollar rose to a three-week high against the Japanese yen after an overnight rally in US Treasury yields. But by the start of European trading, the momentum gained by the US dollar had waned. Thursday’s trading was quiet, with London markets closed for a holiday in Britain.
The dollar fell 0.3 percent against a basket of competing currencies, while the euro rose 0.4 percent, recording 1.0689 dollars, after suffering losses for two days. The yen reversed its early decline and last traded 129.87 yen to the dollar, up slightly on Thursday.
This week’s data showed more strength than expected for the US economy, reconfirming the possibility of its resilience better than competing economies even with the global economic slowdown.
A very high reading of inflation in the eurozone, which reached record levels this week, increased pressure on the European Central, which holds a monetary policy meeting next week, to act to curb price increases, even if at the cost of weakening an already slowing economy.
The Swiss franc rose 0.3 percent to 1.022 francs per euro, its highest level in a month, after prices in Switzerland rose to a 14-year high in May.
Against the dollar, the Swiss franc rose 0.5% to 0.9576, its highest level in two days.
The Canadian dollar was little changed on Thursday at 1.2657 after the Central Bank of Canada on Wednesday, as expected, raised interest rates by 50 basis points and hinted at more monetary tightening ahead.
Despite the US dollar’s decline on Thursday, many analysts still expect it to outperform the rest of the currencies if economic data supports a further recovery in US Treasury yields.
