Early trade in New York: Dovish central banks lift US dollar against rivals

The dollar rose on Thursday against rivals - which were weakened by dovish soundings from central banks - in spite of a cut to the estimate of US economic growth in the fourth quarter. The Reserve Bank of New Zealand this week joined a growing list of central banks that have turned dovish amid signs of a slowing global economy, saying its next move in interest rates was likely to be a cut.
With many currencies on the defensive, the dollar has brushed aside a decline in benchmark US Treasury yields to 15-month lows. The dollar index measuring the greenback against a basket of six major currencies gained 0.39 percent to 97.126, at two-week highs in its third day of gains.
The euro weakened 0.12 percent to $1.1234 as speculation grows that the European Central Bank will introduce a tiered deposit rate - a sign that policymakers plan to keep interest rates low for longer. The euro remains above 21-month lows of $1.1167 touched a few weeks ago.
"Divergence in economic performance is still a good provider of dollar strength and the evidence is in its favour when it comes to most indicators," said Juan Perez, senior currency trader at Tempus Inc in Washington.
Tumbling euro zone government bond yields have also weighed on the euro.
The Swiss franc held near 20-month highs, last at 1.1191 per euro. Analysts noted that the Swiss National Bank has intervened below 1.12 in the past to stop the franc from strengthening further.
Sterling fell below $1.310 after British Prime Minister Theresa May's offer on Wednesday to quit failed to sway hard-line opponents to back her Brexit withdrawal deal.