Dollar firms on upbeat U.S. data but sagging yields cap gains
The dollar inched up against a basket of peers on Thursday after data shed more positive light on the U.S. economy, although sagging Treasury yields tempered the greenback's gains.
The dollar index against a group of six major currencies (DXY) was 0.05 percent higher at 93.512. It had declined 0.1 percent the previous day as talk the next head of the Federal Reserve could be a less hawkish candidate than expected knocked it off seven-week highs.
The greenback managed to crawl back after Wednesday's data showed U.S. service sector growth hit is fastest in 12 years in September and private employers added more jobs than forecast despite Hurricane Harvey and Irma.
The gains, however, were kept in check with Treasury yields having pulled back from three-month peaks.
"The dollar has not been able to take full advantage of the latest series of strong U.S. data as Treasury yields have come down from their peaks," said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.
The dollar index had scaled the seven-week peak of 93.920 on Tuesday, when the 10-year Treasury yield (US10YT=RR) hit the three-month high of 2.371 percent after strong U.S. manufacturing data hardened expectations for the Fed to raise interest rates by year-end.
The 10-year Treasury yield last stood at 2.331 percent.
The euro was a shade lower at $1.1755
Immediate focus was on the minutes of the European Central Bank's September policy meeting due later in the global day.
The ECB signaled at the meeting that while it could announce a plan this month for a gradual exit from its very easy monetary policy, it was in no hurry to end it.
The central bank also mentioned the potentially negative aspects of a strong euro at the September policy meeting so the markets will look closely at the minutes to gauge what was discussed about the currency.
The dollar was 0.1 percent higher at 112.850 yen
The Australian dollar was flat at $0.7861