Investing.com - The dollar strengthened broadly to two-month highs against the other major currencies on Friday, as a surprise rate cut in China dampened risk sentiment and the previous session's upbeat U.S. data continued to support the greenback.
The dollar was higher against the yen, with USD/JPY up 0.33% at one-month highs of 121.10.
The greenback strengthened broadly after China's central bank cut interest rates for the sixth time since November in another attempt to boost the economy.
The dollar was also boosted after data on Thursday showed that the number of individuals filing for initial jobless benefits in the week ending October 17 increased by 3,000 to 259,000. Analysts had expected jobless claims to rise by 9,000 to 265,000.
A separate report showed that U.S. existing home sales increased by 4.7% to 5.55 million units last month from 5.30 million in August, compared to expectations for a 1.4% rise.
The euro erased earlier gains and EUR/USD was down 0.74% at two-month lows of 1.1022.
The single currency remained under pressure after European Central Bank President Mario Draghi said on Thursday that the central bank will "reexamine" its monetary policy in December, hinting at the possibility for further easing measures.
Earlier Friday, research group Markit said that Germany's preliminary manufacturing purchasing managers' index ticked down to 51.6 this month from 52.3 in September, while the services PMI rose to 55.2 from 54.1.
In France, the preliminary manufacturing PMI came in at 50.7 in October, Market reported, up from 50.6 the previous month, while the services PMI ticked up to 52.3 from 51.9.
For the entire euro zone, Markit said the composite PMI, which includes both manufacturing and service sector activity, rose to 54.0 in October from 53.6 the previous month.
Elsewhere, the dollar was higher against the pound and the Swiss franc, with GBP/USD shedding 0.36% to 1.5337 and with USD/CHF advancing 0.40% to 0.9770.
The Australian dollar was higher, with AUD/USD up 0.18% at 0.7220, while NZD/USD dropped 0.65% to 0.6750.
USD/CAD gained 0.51% to trade at three-week highs of 1.3159.
Data earlier showed that Canada's consumer price index fell 0.2% in September, compared to expectations for a 0.1% downtick. Year-on-year, consumer prices rose 1.0% last month, disappointing expectations for a 1.1% increase.
Core CPI, which excludes the eight most volatile items, ticked up 0.2% last month, compared to expectations for a 0.3% gain.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.68% at 97.07, the highest level since August 19.