Investing.com - The dollar rose to session highs against the yen and the euro on Thursday after data showing that the U.S. economy expanded 3.2% in the fourth quarter bolstered demand.
USD/JPY was up 0.46% to 102.73 after falling to session lows of 102.54 earlier.
The dollar strengthened after the Commerce Department said gross domestic product expanded 3.2% I the three months to December, in line with forecasts, following a 4.1% rise in the third quarter.
Consumer spending rose by 3.3%, the strongest since the fourth quarter of 2010 while exports grew by 11.4%.
Separate reports showed that weekly jobless claims rose more than forecast last week, while pending home sales fell unexpectedly in December.
The Labor Department said the number of people who filed for unemployment assistance in the U.S. last week rose by 19,000 to 348,000 from the previous week’s revised total of 329,000.
The National Association of Realtors said its pending home sales index dropped by a seasonally adjusted 8.7% last month, disappointing expectations for a 0.3% gain.
Unease over emerging markets continued underpin safe haven demand for the yen, limiting the dollar’s gains, amid concerns over the impact of cuts in Fed stimulus and worries over a possible slowdown in China.
EUR/USD hit 1.3553, the lowest since January 23 and was last down 0.81% to 1.3552.
The euro came under pressure after data released on Thursday showed that the annual rate of inflation in Germany slowed to 1.3% in January from 1.4% in December, compared to expectations for an uptick to 1.5%. The data fuelled concerns over the risk of deflation in the euro area.
German inflation fell 0.6% in January from a month earlier. Market expectations were for a decline of 0.4%.
The pound was lower against the dollar, with GBP/USD falling 0.44% to 1.6489. The dollar extended gains against the Swiss franc, with USD/CHF rallying 1.03% to 0.9036.
The New Zealand dollar fell to one-month lows, with NZD/USD down 0.89% to 0.8142. The drop in the kiwi came after the Reserve Bank of New Zealand left rates on hold on Wednesday, disappointing some market expectations for a rate hike.
The RBNZ left the cash rate unchanged at a record low of 2.5%, but said the country’s "economic expansion has considerable momentum" and added that a return of interest rates to more normal levels can be expected "soon."
The Australian dollar pushed higher, with AUD/USD rising 0.27% to 0.8763, up from lows of 0.8711.
The Canadian dollar steady at four-and-a-half-year lows against the U.S. dollar, with USD/CAD edging up 0.11% to 1.1179.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.71% to 81.20.