The dollar index was trading at 95.54 in European trade on Wednesday. Currency analysts said the index was close to its 100-day moving average of about 95.53 – an important technical level that could suggest further gains if the dollar holds above it.
"The dollar index is trading around a pivotal level here," Jeremy Stretch, head of currency strategy at CIBC, told CNBC. "If we can make some gains and hold them over next few sessions, the dollar should continue to rebound."
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Analysts said economic data was key to the dollar's outlook, and, more immediately, the release of the minutes from the Fed's last meeting which are due out later in the day.
"Clearly, if we see improvements in the data and tone in the minutes that is not more dovish than expected, then the dollar should keep its momentum," Stretch added.