The dollar again strengthened in European trading on Thursday and tested highs around 1.4725. The US currency was unable to break resistance levels, but found support around 1.4780.

The US data retained the weaker tone seen throughout this week. New home sales rose slightly to 728,000 for October, but this followed a sharp downward revision for September to 716,000 and sales were still close to a 12-year low. There was a decline in inventories which offered some relief as prices were cut.

US jobless claims rose to 352,000 in the latest week from 329,000 previously which suggested some deterioration in the labour market, but third-quarter GDP growth was revised up to 4.9% from 3.9% previously.

Overall confidence in the economy remains weak with further expectations of a December interest rate cut. Confidence over further Fed action increased further after Bernanke’s comments with the Fed Chairman stating that the financial strains had affected the economy’s prospects. The dollar’s best hope for gains is increased unease over the global growth outlook.