Investing.com - The dollar strengthened in Asian trading on Thursday, erasing losses sustained after investors sold the greenback to buy the euro and other assets in wake of the International Monetary Fund's plans to expand its lending capacity by $500 billion.
Hopes that Greece will work out a deal with private creditors to restructure its obligations also convinced investors to tip-toe out of the safety of the dollar and buy euro-denominated and other assets worldwide, although the dollar bounced back by early Thursday in Asia.
The dollar on Thursday was down against the euro, with EUR/USD climbing 0.03% and trading at 1.2868.
With the International Monetary Fund expressing a willingness to raise hundreds of billions of dollars to bolster shaky European economies, including with funds committed by eurozone countries themselves, investors decided to take on risk, which weakened the dollar.
"The U.S. recovery is the only reason that can justify the current risk-on markets," said Junichi Ishikawa, an analyst in Tokyo at IG Markets Securities, according to Bloomberg.
"When stocks are higher, investors tend to sell currencies" such as the dollar.
Meanwhile, the dollar was weaker against the pound, with Cable rising 0.01% to hit 1.5441.
The greenback was down 0.11% against the yen, with USD/JPY trading at 76.74, and down against the Swiss franc, with USD/CHF losing 0.09% at 0.9386.
The greenback was mixed against its counterparts in Canada, Australia and New Zealand, with USD/CAD dropping 0.08% at 1.0104, AUD/USD down 0.29% to 1.0405 and NZD/USD down 0.27% at 0.8022.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.03% in choppy trade at 80.65.
Investors were awaiting U.S. inflation data, initial jobless claims as well as numbers on housing starts and building permits later Thursday, while the Federal Reserve Philadelphia Manufacturing Index will come out as well.
The European Central Bank will release a report on current account balance followed by its monthly bulletin.
Japan will release its All Industries Activity Index later Thursday as well.
Hopes that Greece will work out a deal with private creditors to restructure its obligations also convinced investors to tip-toe out of the safety of the dollar and buy euro-denominated and other assets worldwide, although the dollar bounced back by early Thursday in Asia.
The dollar on Thursday was down against the euro, with EUR/USD climbing 0.03% and trading at 1.2868.
With the International Monetary Fund expressing a willingness to raise hundreds of billions of dollars to bolster shaky European economies, including with funds committed by eurozone countries themselves, investors decided to take on risk, which weakened the dollar.
"The U.S. recovery is the only reason that can justify the current risk-on markets," said Junichi Ishikawa, an analyst in Tokyo at IG Markets Securities, according to Bloomberg.
"When stocks are higher, investors tend to sell currencies" such as the dollar.
Meanwhile, the dollar was weaker against the pound, with Cable rising 0.01% to hit 1.5441.
The greenback was down 0.11% against the yen, with USD/JPY trading at 76.74, and down against the Swiss franc, with USD/CHF losing 0.09% at 0.9386.
The greenback was mixed against its counterparts in Canada, Australia and New Zealand, with USD/CAD dropping 0.08% at 1.0104, AUD/USD down 0.29% to 1.0405 and NZD/USD down 0.27% at 0.8022.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.03% in choppy trade at 80.65.
Investors were awaiting U.S. inflation data, initial jobless claims as well as numbers on housing starts and building permits later Thursday, while the Federal Reserve Philadelphia Manufacturing Index will come out as well.
The European Central Bank will release a report on current account balance followed by its monthly bulletin.
Japan will release its All Industries Activity Index later Thursday as well.