The dollar rose against a basket of currencies for a third day on Thursday as traders closed out profitable bets against the greenback before Friday's U.S. payrolls report which may confirm the view the Federal Reserve will not raise interest rates soon.
The dollar index, which measures the U.S. dollar's value versus six currencies, fell to its lowest in over 15 months on Tuesday, led by the yen's surge partly on skepticism about whether Japan policy-makers would intervene to slow its rise.
"We are seeing some short-covering lifting the dollar against most major currencies. You can largely attribute it to tomorrow's nonfarm payrolls report," said Ron Simpson, director of currency research at Action Economics in Tampa, Florida.
Trading volume was thin as Japanese markets were shut for the Golden Week holiday. They will reopen on Friday.