Investing.com -- The dollar is continuing its march higher early Wednesday in Europe, enjoying further support from a strong corporate earnings season at home coupled with better-than-expected economic data.
Encouraging reports from companies as diverse as Twitter, United Technologies and Lockheed Martin were buttressed on Tuesday by a robust new home sales report, propelling U.S. stock indexes to new record high closes. As such, the dollar is being supported by strong demand for U.S. assets.
At 03:00 AM ET (0700 GMT), the dollar index, which measures the greenback against a basket of six major currencies, was at 97.363, roughly unchanged from late Tuesday in Europe but up around 0.4% from 24 hours earlier, and up 0.7% from a week earlier. It’s now closing in on this year’s high of 97.655.
The dollar could be set for further gains in Europe if the German Ifo business climate index, due at 04:00 AM ET, suggests that the euro zone’s most important economy is still sputtering. In China, by contrast, there were signs that the central bank is easing back on its stimulus after first-quarter growth data exceeded expectations earlier this month.
Political uncertainties are also dampening the mood, with Spain’s upcoming elections at the weekend and the EU parliamentary elections both set to underline the continued advances of populists at the expense of traditional mainstream parties.
The British pound, meanwhile, continues to suffer from Brexit-related uncertainties as the return of parliament after the Easter recess brings a fresh round of rumors of Conservative lawmakers looking to depose Prime Minister Theresa May.
Elsewhere, the sharp rise in oil prices drove the ruble to its highest level against the dollar since July last year, while creating further problems for Turkey, a net importer whose current account suffers when oil prices rise. The lira hit its lowest level since October in early trade in Istanbul.
Overnight, the dollar also hit a seven-week high against the Aussie after weaker-than-expected inflation data encouraged hopes of a cut in interest rates from the Reserve Bank of Australia. That also pulled the dollar higher against the kiwi.