Investing.com - The dollar was trading near three-week highs the other major currencies on Thursday, as investors looked ahead to the U.S. employment report for August, scheduled for Friday, for fresh hints on the direction of interest rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.08% at 96.10.
Traders were looking to the latest data on the strength of the U.S. labor market for indications on how soon the Federal Reserve may raise interest rates again.
Earlier in the week, Fed Vice Chairman Stanley Fischer said the U.S. labor market is almost at full strength and the pace of interest rate increases will be data dependent.
The dollar has strengthened since Fed Chair Janet Yellen said late last week that the case for raising U.S. interest rates has strengthened in recent months, citing improvements in the labor market.
The U.S. central bank raised interest rates for the first time in almost a decade in December.
Expectations of higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.
Meanwhile, a report on Thursday showed that the number of Americans filing for unemployment benefits ticked higher last week, but still pointed to sustained strength in the labor market.
Initial jobless claims rose by 2,000 to 263,000 the Labor Department said. Economists had expected jobless claims to rise to 265,000.
The euro was at two-week lows, with EUR/USD down 0.15% to 1.1139.
In the euro zone, data showed that manufacturing activity slowed in August and could slow further in the coming months.
The dollar was also stronger against the yen, with USD/JPY up 0.44% to 103.86, the most since July 29.
Sterling rallied, with GBP/USD advancing 0.87% to 1.3256, boosted by robust post-Brexit manufacturing data.