The U.S. dollar firmed against its peers on Thursday amid expectations the Federal Reserve will take aggressive policy measures, including a series of sharp rate hikes, to combat inflation.
Traders awaited the Labor Department's inflation data for May, due on Friday. The report is expected to show that consumer prices increased by 0.7% in May after rising by 0.3% in April.
Core consumer prices, which exclude food and energy prices, are expected to climb by 0.5% in May following a 0.6% advance in April.
The annual rate of consumer price growth is expected to hold at 8.3%, while the annual rate of core consumer price growth is expected to slow to 5.9% from 6.2%.
The inflation data could have an impact on the outlook for monetary policy ahead of the Federal Reserve's decision on interest rates next Wednesday.
A report released by the Labor Department this morning showed first-time claims for U.S. unemployment benefits rose by more than expected in the week ended June 4th, climbing to 229,000, an increase of 27,000 from the previous week's revised level of 202,000.
Economists had expected jobless claims to rise to 210,000 from the 200,000 originally reported for the previous week.
The dollar index surged to 103.37, gaining more than 0.8%, despite staying a bit weak during the Asian and European sessions.
Against the Euro, the dollar firmed to $1.0619 from $1.0719, after the European Central Bank
The dollar is trading at $1.2494 against Pound Sterling, gaining from $1.2537.
Against the Japanese currency, the dollar strengthened a bit to 134.38 yen from 134.27 yen.
The dollar firmed to 0.7099 against the Aussie, after having closed at 0.7192 on Wednesday.
Against the Swiss franc, the dollar firmed, fetching CHF 0.9808 a unit, about 0.22% more than the previous close of CHF 0.9786.
The dollar is stronger against the Canadian currency, fetching C$ 1.2700, up from C$ 1.2560, as oil prices drifted lower amid fresh concerns about outlook for energy demand.
