LONDON (MarketWatch) -- Rising equities kept the U.S. dollar under pressure Thursday, a day after Wall Street's Dow Jones Industrial Average pushed back above the 10,000 level for the first time in a year.
"The Dow closed above 10,000 overnight, adding fuel to the pro-risk theme for currencies but leaving government bonds vulnerable," said Kenneth Broux, market economist at Lloyds TSB.
U.S. stock index futures were steady ahead of a further round of earnings releases as well as economic data, including weekly initial jobless claims and September consumer price inflation at 8:30 a.m. Eastern, while European equities were mixed. See Indications..
"Pro-risk" trades have spelled weakness for the U.S. dollar, which has tumbled as world equities have rallied since March. The U.S. dollar index (DXY 75.41, -0.14, -0.19%) , a measure of the greenback against a trade-weighted basket of currencies, has fallen by around 15% from its 2009 peak and has slipped to a series of 14-month lows in recent days.
The dollar index traded at 75.299 in recent action, down from 75.513 late Wednesday.
"Only until such a time that the U.S. [Federal Reserve] starts to signal an end to ultra-easy monetary-policy settings and Washington does more to convince that it isn't benignly neglecting its currency will the U.S. dollar be able to stand up better during periods of risk aversion," said analysts at Action Economics.
A spate of recent comments from global finance officials concerned about the weakening dollar has failed to lift the greenback as investors bet major central banks won't back up their remarks by buying dollars. Read more on weak dollar.
Favorable third-quarter earnings data have helped boost equities and risk-oriented currencies, pushing the euro toward the psychologically important $1.50 mark versus the U.S. dollar.
The euro traded at $1.4920 versus the U.S. dollar in recent action, trimming earlier gains to show little change from $1.4916 in North American trade late Wednesday.
Commodity-oriented currencies have been the main beneficiaries of rising risk appetite, buoyed by rising prices for oil and metals and bullish economic data from China.
The Australian dollar was up 0.6% against its U.S. counterpart to trade at 91.95 U.S. cents in recent action.
Earlier, the Australian dollar rose to a 14-month high after Reserve Bank of Australia Gov. Glenn Stevens reportedly implied in a speech that more interest-rate increases were coming.
"If we were prepared to cut rates rapidly, to a very low level, in response to a threat but then were too timid to lessen that stimulus in a timely way when the threat had passed, we would have a bias in our monetary-policy framework," Stevens said, according to Dow Jones Newswires.
Earlier this month, Australia became the first country in the Group of 20 nations to withdraw monetary stimulus when its central bank raised its key policy rate, hiking by a quarter-point to 3.25%. See full story on Australian rate hike.
The dollar bought 90.09 yen, up from 89.47 yen in late North American trading Wednesday.
The British pound climbed to $1.6212 from $1.5975 late Wednesday.
The U.S. dollar bought 1.0261 Canadian dollars, down from C$1.0277 late Wednesday.
