LONDON (AFP) — The dollar resumed its climb against the euro and yen on Friday following losses in Asian trade and after a rally overnight sparked by an upgrade to US economic growth, traders said.
In European trading, the euro fell to 1.5487 dollars from 1.5503 in New York late on Thursday.
Against the Japanese currency, the dollar rose to 105.54 yen from 105.52.
The greenback had got a boost on Thursday after first-quarter US growth was revised to a 0.9 percent annual pace from the initial estimate of 0.6 percent.
The dollar briefly rose to 105.88 yen in New York, a level not seen since late February, but it failed to sustain the advance in Asian trade on Friday.
Dealers said the US growth data further reduced prospects of another interest rate cut by the US Federal Reserve and this supported the dollar, which has suffered against the euro because of a large yield differential.
"Certainly the signs are that the Fed's burst of easing is probably over and that is causing the market to reappraise the possibility of interest rate hikes," said Ian Copsey, a senior financial analyst at Global Forex Trading.
The dollar has also been supported this week by a rebound on Wall Street.
But Shuichi Kanehira, a forex dealer at Mizuho Corporate Bank, believes stocks may struggle to sustain the upward momentum.
"While the stock market has not so far showed any negative response to rising Treasury yields, which lent support to the dollar, the stock market may start reacting negatively to a change in the market's perception about interest rates," Kanehira said.
"In addition, we have to assess once again the current state of the US economy through such important data as non-farm payroll data" due next week, he added.
The US Federal Reserve has been steadily easing its monetary policy, lowering its benchmark Fed Funds rate to 2.0 percent amid slower economic growth.
In London on Friday, the euro changed hands at 1.5487 dollars against 1.5503 late on Thursday, at 163.39 yen (163.58), 0.7860 pounds (0.7849) and 1.6277 Swiss francs (1.6275).
The dollar stood at 105.54 yen (105.52) and 1.0508 Swiss francs (1.0496).
The pound was at 1.9704 dollars (1.9745).
On the London Bullion Market, the price of gold slid to 877.45 dollars per ounce from 883 dollars late on Thursday.
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