NEW YORK: The US dollar traded at a two-month high and was set for a fifth day of gains on Thursday as investors sought safety on concerns over economic recovery as coronavirus cases surged in Europe and on US data showed rising unemployment claims.
Federal Reserve policymakers have called on the US government to provide more fiscal support, fuelling a bout of selling in risky assets overnight, while European economic data has worsened in recent days prompting investors to lighten their positions after a rally in August.
"The US dollar weakness theme got over-extended and there are people covering their shorts and wondering if the weaker dollar trend has had enough. Economic data could play into that narrative," said Katy Kaminski, chief research strategist and portfolio manager at AlphaSimplex Group, in Boston.
The dollar index, which measures the greenback against a basket of major currencies, was last up 0.08% at 94.46 after earlier rising to 94.59, its highest level since July 24.
The Norwegian and the Swedish crown came under particular selling pressure.
The dollar was last up 1% against the Swedish crown after touching its highest level against the currency since July 14. The dollar was up 0.64% and at its highest since July 1 against the Norwegian crown. The euro was down 0.12% against the dollar at $1.1645. The Aussie dollar fell 0.51% to $0.7038, near its weakest since July 21.
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