Investing.com - The dollar gained on Thursday with bets that the combination of tax cuts and tough trade policies by President Donald Trump would support the greenback.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.57% at 100.48, off seven-week lows of 99.77 hit this week.
USD/JPY changed hands at 114.43, up 1.00%, while GBP/USD fell 0.33% to 1.2593 as British Prime Minister Theresa May arrives in the U.S. for a meeting with President Donald Trump that has high stakes for trade. USD/CAD rose 0.18% to 1.3093. A social media war of words between Mexican President Enrique Pena Nieto over the proposed border wall caused a canceled a meeting with President Donald Trump and led to the dollar moving higher against the Mexican peso. USD/MXN rose to 21.30, after hitting 20.86 earlier in the day. The peso was down 1.1% against the dollar at midday but it recovered about a half percent in afternoon trading. The low for the peso was when it reached 22.0385 to the dollar on Jan. 11.
The U.S. Commerce Department said new home sales sank by 10.4% to 536,000 units last month, compared to expectations for a 1.0% drop to 588,000 units.
The report came after the U.S. Department of Labor said that initial jobless claims increased by 22,000 in the week ending January 21 to 259,000 from the previous week’s total of 237,000.
Analysts had expected jobless claims to rise by 13,000 last week.
Investors remained cautious after Trump on Wednesday ordered construction of a U.S.-Mexican border wall and punishment for cities shielding illegal immigrants.
In addition, Trump was expected to sign an executive order in the coming days to block the entry of refugees from Syria and suspend the entry of any immigrants from Muslim-majority Middle Eastern and African countries.