Investing.com - The dollar held steady at a 14-year peak against the other majors currencies on Thursday, amid ongoing optimism over the U.S. economy and as trading volumes were set to remain thin for the Thanksgiving holiday.
The greenback remained supported amid expectations that President-elect Donald Trump’s plans to ramp up fiscal spending and cut taxes will spur economic growth and inflation.
Faster growth would spark inflation, which in turn would prompt the Fed to tighten monetary policy a faster rate than had previously been expected.
The U.S. dollar has also been boosted by bets that the U.S. central bank will almost certainly raise interest rates next month.
Fed Chair Janet Yellen on Thursday reiterated that a rate hike “could well become appropriate relatively soon.”
EUR/USD added 0.16% to 1.0570, off a 20-month trough of 1.0518 hit overnight.
Earlier Thursday, the Ifo institute said its business climate index ticked down to 110.4 this month from 110.5 in October, but still strong.
Economists had expected a reading of 110.5.
Elsewhere, GBP/USD rose 0.23% to 1.2468.
USD/JPY gained 0.56% to 113.17, just off an eight-month high of 113.53 hit earlier in the day, while USD/CHF held steady at 1.0156.
The Australian dollar held steady, with AUD/USD gained 0.33% to 0.7408, while NZD/USD was little changed at 0.7005.
Meanwhile, USD/CAD held steady at 1.3493.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 101.67, just off a fresh 14-year peak of 101.97 hit overnight.