The dollar rallied across the board on Wednesday, bolstered by a rise in U.S. Treasury yields that suggested the ongoing recovery in the world's largest economy was firmly on track.
Better-than-expected U.S. housing data also supported the dollar, which rose for the first time in four sessions against a basket of currencies. U.S. Treasuries yields were also higher on the day.
A U.S. Treasury sale on Wednesday of $35 billion in new five-year notes met with relatively low demand. "The dollar is being supported by higher yields right now, suggesting that the ongoing recovery in the U.S. is still positive overall," said Brian Kim, currency strategist, at RBS Securities in Stamford, Conn.
New U.S. home sales jumped to a five-year high in June, while other data on Wednesday showed an acceleration in factory activity in July, boosting hopes of a third-quarter pick-up in economic growth.
In afternoon trading, the dollar index was up 0.4 percent to 82.27, rising after three days of losses.