Dollar lifted by Fed minutes, tracks higher US yields

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The dollar rose for a second straight session on Thursday, tracking gains in U.S. Treasury yields, as the Federal Reserve's minutes of its July meeting cemented market expectations that the central bank will reduce its bond-buying program in September. The greenback, however, trimmed gains after data showed U.S. initial jobless claims rose. The report did not change the expectation for tapering next month.

In New York trading, the dollar was up less than 0.1 percent against a basket of currencies at 81.46, after breaking through initial resistance at 81.604, its 200-day moving average. It hit an intra-day high of 81.719—a one-week peak. Against Japan's currency the dollar was last at 98.69 yen, up 1.1 percent.

Against the buoyant U.S. dollar, the euro was mostly flat at $1.3361. Earlier in the global session, it had fallen on reported selling by real money accounts. Chartists said support was at $1.3243, the May 1 high.

Europe's common currency is finally garnering support from investors after being shunned during most of the financial crisis. Some investors are convinced that the euro zone—led by Germany—has turned the corner.

The euro zone's PMI figures boosted the euro against the yen, rising 1.1 percent to 131.89 yen. The euro also gained against sterling, up 0.5 percent at 85.68 pence.

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