Dollar holds overnight gains as traders trim bets, yuan rises on upbeat data

The dollar held on to overnight gains on Thursday as investors lowered bets against the U.S. currency and sold the euro. Meanwhile, the European Central Bank expressed concern on the single currency’s rise.

The dollar index bounced nearly 1% above the 28-month low it hit on Tuesday. Several analysts expect the greenback to rise but not for long.

The euro initially fell 0.5% and last stood at $1.1822 in Asian trade. The euro’s selloff was prompted by ECB’s chief economist Philip Lane who said that the exchange rate matters for monetary policy. 

The yuan gained the most on Thursday, climbing 0.1% to 6.8250 on the dollar in onshore trade. The Chinese currency was lifted by upbeat service sector data, which rose for the fourth straight month. 

Elsewhere, the yen is slowly retreating back to where it was before Shinzo Abe announced his resignation. The Japanese currency slid to 106.21 against the dollar.

The Aussie fell 0.2% to $0.7321 and the kiwi sat at $0.6761.