The dollar continued to rise on Wednesday and into Thursday, erasing losses seen on the announcement of the new bill to delay the tax hikes and spending cuts of the 'fiscal cliff' on Tuesday.

Overnight, the euro dropped from $1.3177 to $1.3138, while the pound declined from $1.6249 to $1.6221.

The ICE dollar index rose back above 80 points overnight, from 79.847 to 80.026.

While the budget saga Stateside is far from over - talks over spending cuts go on while concerns over the government's debt ceiling have resurfaced - the House of Representatives passed a Senate-backed bill in the early hours of Tuesday morning to stop massive tax rises and spending cuts, by 257 votes to 167. A day before the same legislation had cleared the Senate by a majority of 89 votes to 8.

Analysts at Link Securities said that the agreement eliminates the "worst case scenario" and the danger of a new US recession.

Meanwhile, the dollar also rose against the Japanese yen, up ¥87.26 from ¥87.24, to reach a level unseen since 2010.

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