Investing.com - The dollar rose to fresh seven-year highs against the weaker yen on Thursday, while the euro slipped lower after data showing euro zone private sector output slowed this month clouded the outlook for fourth quarter growth.
USD/JPY hit highs of 118.98, the most since August 2007, before pulling back to 118.23, 0.26% higher for the day.
Demand for the dollar continued to be underpinned after the minutes of the Federal Reserve’s latest meeting indicated that officials believe the economic recovery is strong enough to withstand external threats to growth, but offered little additional clarity about when rates could start to rise.
Markets are currently expecting the U.S. central bank to start raising rates sometime around September 2015. In contrast, the Bank of Japan is expected to continue monetary easing in order to shore up growth and inflation.
EUR/USD hit session lows of 1.2504 and was last down 0.19% to 1.2528.
The drop in the euro came after a report showing the euro zone’s services purchasing managers’ index fell to 51.3 this month, while the manufacturing PMI slid to 50.4 from 50.6 in October.
The report said the PMI surveys pointed to economic growth of just 0.1% to 0.2% in the current quarter.
The euro erased gains against the yen following the data, with EUR/JPY trading at 147.97, off the six-year peaks of 149.14 struck earlier in the session.
The pound was almost unchanged against the dollar, with GBP/USD at 1.5672, up from lows of 1.5632.
Sterling found support after data showed that U.K. retail sales rebounded by a stronger than forecast 0.8% in October after a 0.4% drop the previous month.
USD/CHF was up 0.19% to 0.9587, while EUR/CHF was little changed near 26-month lows of 1.2010, not far from the Swiss National Bank’s exchange rate cap of 1.20 per euro.
The Swiss franc has strengthened against the euro in recent sessions ahead of a vote later this month which could force the SNB to increase its gold reserves, a move which could restrict its ability to cap the value of the franc against the euro.
AUD/USD was steady at 0.8611, while NZD/USD was almost flat at 0.7852. The commodity linked dollars fell to session lows after data released earlier in the day showed that China’s HSBC manufacturing PMI fell to a six-month low of 50.0 this month, adding to concerns over a slowdown.
Elsewhere, USD/CAD was little changed at 1.1342.
The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was up 0.16% to 87.82, not far from last week’s more than four-year highs of 88.36.