Early trade in New York: Dollar drops for third day on US stimulus optimism

NEW YORK: The dollar fell for a third straight session on Thursday, with investors seeking out higher-yielding currencies, as a slew of better-than-expected US data and continued optimism about a massive stimulus package spurred hopes of a recovery in the world's largest economy.

The euro, on the other hand, gained versus an overall weak dollar, even as European Central Bank President Christine Lagarde warned about a renewed surge in COVID-19 infections and the prospect of prolonged restrictions that could challenge the region's economic outlook.

Norway's central bank also struck a hawkish tone on Thursday. The bank said it plans to raise rates early next year as the economy recovers from the coronavirus pandemic. That pushed the Norwegian crown higher versus the dollar, trading up 0.9% at 8.8045.

In midmorning trading, the dollar index fell 0.3% to 90.11, after touching a nearly one-month high of 90.956 on Monday.

The euro gained 0.5% against the dollar to $1.2159, rising as well versus the yen to 125.89 yen. The greenback also dropped versus currencies tied to commodity prices such as the Australian, Canadian, and New Zealand dollars.