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NEW YORK — The U.S. dollar rose against

major currencies on Thursday as a shot of positive economic news

contrasted with comments from the European Central Bank that

euro zone weakness still requires the support of its current

pace of bond purchases.

The move was reinforced late in the day by a risk-off,

dollar bid when news broke that U.S. President Joe Biden will

propose nearly doubling taxes on capital gains for people

earning more than $1 million.

The dollar index against major currencies was up 0.2%

to 91,303 in the late afternoon in New York after markets sifted

through the ECB remarks and news that U.S. new unemployment

claims had fallen to a 13-month low, setting the stage for

blockbuster jobs growth in April.

The euro had been up about 0.1% against the dollar

before the events, but later fell 0.2% on the day to $1.201.

ECB chief Christine Lagarde said policy makers had not

discussed any phasing out the bond-buying program “because it

premature.” She said the economy is still “clouded with

uncertainty” despite signs of improvement and progress with

vaccinations.

Euro zone bond yields dipped after Lagarde spoke.

“Until you see better COVID numbers out of Europe, the

euro’s upside potential is going to be limited,” said Ronald

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Simpson, managing director, global currency analyst at Action

Economics in Safety Harbor, Florida.

Simpson added that if Biden’s tax proposal goes forward it

could hurt the greenback if it spurs stock investors with big

gains to sell before it takes effect.

“That might keep pressure on the stock market, on and off,

for the rest of the year, which would not bode well for the

dollar if we start seeing outflows from U.S. equities,” Simpson

said.

The immediate impact was “not too serious,” said Erik

Bregar, head of FX strategy at Exchange Bank of Canada.

“We’re seeing an extension of this morning’s move post-ECB,”

Bregar said. “It is a classic risk-off, U.S. dollar bid.”

The currency markets initially vacillated over what Lagarde

revealed about the timing of interest rate hikes.

Alex Merk, chief investment officer at Merk Investments in

Palo Alto, California, said the market heard that the ECB would

like to pace its rate moves with those of the U.S. central bank

but also that the two economies have different inflation

trajectories.

In the end, Merk said, “there was no big substance there.”

The back-and-forth of the currencies on Thursday morning was

another example of how markets have been preoccupied with

sorting out how quickly different economies will rebound from

the pandemic and how their interest rates will fluctuate.

On Wednesday the Canadian dollar rose sharply after the Bank

of Canada signaled rate hikes next year and said it was pulling

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back on asset purchases. The announcement marked the first Group

of Seven central bank to move towards withdrawing stimulus.

Now markets are looking toward next week’s meeting of the

U.S. Federal Reserve and possible comments about how it views

future changes in its easy monetary policy.

Yields on were little changed on the day at 1.55% despite

rising about four basis points at one point.

Sentiment toward the dollar has weakened much of this month

after a March spike in Treasury yields reversed course. But

some analysts say the outlook over the longer term remains

positive due to a strong U.S. economy and more coronavirus

vaccinations.

Merk said, “Ultimately what matters is the progress with the

pandemic” and what that means for a global recovery, inflation

and interest rates.

In cryptocurrency markets, ethereum jumped as

much as 10% during the day. Bitcoin slipped about 2%

to $52,800.

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Currency bid prices at 3:31PM (1931 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 91.3030 91.1100 +0.22% 1.469% +91.4250 +90.9980

Euro/Dollar $1.2010 $1.2036 -0.20% -1.69% +$1.2070 +$1.1994

Dollar/Yen 108.0350 108.0400 +0.00% +4.56% +108.2300 +107.8150

Euro/Yen 129.74 130.03 -0.22% +2.22% +130.4600 +129.6800

Dollar/Swiss 0.9178 0.9172 +0.08% +3.75% +0.9191 +0.9145

Sterling/Dollar $1.3839 $1.3927 -0.64% +1.29% +$1.3948 +$1.3825

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Dollar/Canadian 1.2501 1.2495 +0.06% -1.81% +1.2534 +1.2473

Aussie/Dollar $0.7707 $0.7753 -0.62% +0.16% +$0.7764 +$0.7692

Euro/Swiss 1.1021 1.1033 -0.11% +1.98% +1.1047 +1.1015

Euro/Sterling 0.8677 0.8641 +0.42% -2.91% +0.8702 +0.8635

NZ $0.7160 $0.7209 -0.69% -0.31% +$0.7213 +$0.7148

Dollar/Dollar

Dollar/Norway 8.3720 8.3410 +0.51% -2.37% +8.3910 +8.3130

Euro/Norway 10.0577 10.0368 +0.21% -3.91% +10.0729 +10.0127

Dollar/Sweden 8.4326 8.4015 +0.10% +2.88% +8.4506 +8.3861

Euro/Sweden 10.1283 10.1180 +0.10% +0.52% +10.1387 +10.1040

(Reporting by David Henry in New York and Ritvik Carvalho in

London; additional reporting by Stanley White in Tokyo; editing

by Larry King, William Maclean and Andrew Heavens)