A greater focus on forward-looking indicators will could allow the dollar to extend the current rally.

The dollar has continued to gain ground over the past 24 hours due to a combination of a shift in interest rate expectations and a squeeze on short positions

The US data was mixed on Thursday, but offered some degree of forward-looking optimism. There was no evidence of recovery in the housing sector with new home sales falling to a fresh 17-year low annual rate of 526,000 in March from a revised 575,000 rate the previous month while inventories continued to increase.

Headline durable goods orders also fell by 0.3% in March, but there was a 1.5% underlying increase which will trigger some hopes for stabilisation in the sector. Initial jobless claims also fell to 342,000 in the latest week from 375,000 previously.

There has been further speculation that The Federal Reserve would cut interest rates by 0.25% next week and then look for a pause in the rate-cutting process to assess economic trends. An adjustment in rate expectations will provide some degree of dollar support ahead of next Wednesday’s Fed meeting, especially with some reassessment of the ECB interest rate outlook.