On Thursday, the dollar reached new seven-week highs as the market became more optimistic about an agreement to raise the U.S. debt ceiling in order to avoid a potential default and as yet another set of strong economic data further reduced chances on Federal Reserve easing.

Initial jobless claims in the US fell short of expectations last week, coming in at 242,000 vs expectations of 254,000, according to figures released on Thursday.

The Philadelphia Federal Reserve's business index fell to -10.4 in another data point, a lesser decline than anticipated. Markets anticipated a contraction of -19.8.

The dollar index that gauges the greenback versus its major pairs struck 103.38, a new seven-week high, and closed the day up 0.5% at 103.34 following the economic data.

The likelihood that the Federal Reserve will increase its interest rate at its meeting in June is seen by traders to be about 20%. Markets were factoring in a 20% likelihood of a cut around a month ago.