Investing.com - The dollar rose to fresh four-year highs against a basket of other major currencies on Thursday, as Wednesday's upbeat U.S. home sales data fuelled further expectations for an early rate hike by the Federal Reserve.
The dollar found further support after a report on Wednesday showed that U.S. new home sales data rose 18.0% last month to 504,000 units, the highest level since May 2008.
Earlier in the week, a report showed that the U.S. manufacturing sector expanded in September, matching the rate of growth seen in the previous month, which was the strongest in over four years.
The strong data added to expectations that the Fed will hike interest rates sooner than markets are expecting.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, advanced 0.43% to 85.52, the highest level since July 2010.
USD/JPY edged up 0.22%, hovering close to a six-year peak at 109.27.
The euro dropped to nearly two-year lows against the dollar, with EUR/USD last down 0.48% at 1.2719 after European Central Bank President Mario Draghi reiterated the bank's commitment to act with more policy measures to boost inflation in the euro zone.
"We stand ready to use additional unconventional instruments within our mandate, and alter the size or composition of our unconventional interventions should it become necessary to further address risks of a too prolonged period of low inflation," Draghi said.
On Wednesday, Mario Draghi had already vowed to keep monetary policy "accommodative" for as long as needed, and to use every tool at the ECB's disposal to fight deflation.
Elsewhere, GBP/USD slid 0.31% to 1.6290, while USD/CHF climbed 0.43% to trade near 14-month highs at 0.9495.
The Australian and New Zealand dollars were sharply lower. AUD/USD retreated 0.78% to a new seven-month trough at 0.8817 after Reserve Bank of Australia Governor Glenn Stevens said the bank is considering steps to limit home loans to investors, who are distorting the housing market.
NZD/USD plummeted 1.43% to trade at a one-year low of 0.7960, as Reserve Bank of New Zealand Governor Graeme Wheeler signaled that he is prepared to sell the nation's currency to weaken it. Mr. Wheeler added that the kiwi's current level is unjustified and unsustainable.
Meanwhile, USD/CAD hit fresh six-month highs, gaining 0.42% to 1.1104.
Later in the day, the U.S. was to release data on durable goods orders, as well as the weekly report on jobless claims.