The US dollar gained on Thursday on speculation that the Federal Reserve may begin to scale back stimulus measures, while the euro dropped to a six-week low after some disappointing economic data.

Minutes from the Federal Open Market Committee showed a more hawkish tone among policy-makers at the last meeting, suggesting that the Fed would soon begin to taper off its quantitative easing programme soon.

"The hint from US policy makers at tightening money taps has seen the dollar firmer today, with the greenback recording gains against the vast majority of its peers, also benefiting from an exodus from equities, with world benchmarks from Europe to Asia posting hefty losses," said Alex Young, a senior sales trader from CMC Markets.

The dollar index, which tracks the greenback versus a basket of six other currencies, rose 0.34% from 81.08 to 81.36.

In an interview on Thursday evening, James Bullard, the President of the St Louis Federal Reserve, said that the Fed could consider scaling back its $85bn-per-month asset purchases if the recovery continues. He suggested that the Fed could raise interest rates by June 2014, as the unemployment rate falls below 6.5%.

Nevertheless, the dollar trimmed gains after the jobless claims came in above forecasts and the Philly Fed manufacturing index misses estimates.

Meanwhile, the euro dropped 0.7% against the dollar to $1,3190, recovering slightly after falling to a low of $1,3161, its lowest mark since early January.

This came after Eurozone purchasing managers' indices (PMIs) showed that the downturn in the region steepened in February. The Eurozone composite PMI index fell to 47.3 points from January's reading of 48.6, while the consensus had expected to see an improvement to 49.0 points.

BC

Related share prices