Investing.com - The dollar edged higher against a basket of major currencies on Thursday after U.S. data indicated that the U.S. economy is continuing to improve.
The dollar found support after the Labor Department said initial U.S. jobless claims dipped by 2,000 people to 312,000 last week, a sign that the recovery in the labor market is continuing.
A separate report showed that personal incomes rose by 0.4% in May, in line with forecasts. However, personal spending rose by just 0.2%, below forecasts for 0.4%.
The greenback’s gains were limited after data on Wednesday showing that the U.S. economy contracted at a faster pace than initially estimated in the first quarter signaled that the Federal Reserve may keep rates on hold for an extended period.
Sterling trimmed gains against the dollar, with GBP/USD at 1.7006, off session highs of 1.7040.
The BoE announced a new affordability test on banks and a cap on home loans on Thursday, in a bid to prevent the housing market from destabilizing the U.K. economy. BoE Governor Mark Carney said the recovery is broadening and strengthening, but the housing market is the main risk to financial stability.
Demand for sterling continued to be underpinned as the new measures did little to alter expectations that the BoE will raise interest rates ahead of other central banks.
EUR/USD was down 0.26% to 1.3596. The shared currency was also weaker against the pound, with EUR/GBP losing 0.44% to trade at 0.7990, close to the more than one-and-a-half year low of 0.7958 set earlier this month.
Meanwhile, USD/CHF edged up 0.17% to 0.8942.
AUD/USD dipped 0.06% to 0.9399, while NZD/USD was up 0.22% to 0.8755 after rising as high as 0.8776 earlier.
The Canadian dollar remained supported at five-and-a-half month highs, with USD/CAD at 1.0716.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, eased up 0.11% to 80.35.