By Carla Mozee, MarketWatch , Kosaku Narioka

Aussie drops after downbeat data

The dollar held to gains Thursday, as the prospect of action from U.S. and European central banks helped lift the greenback to a seven-month high against the euro.

The ICE U.S. Dollar Index , a measure of the dollar's strength against a basket of six rival currencies, rose 0.1% to 99.845.

Several U.S. economic indicators released on Wednesday -- including a rise in October orders for durable goods (http://www.marketwatch.com/story/durable-goods-orders-snap-back-in-october-2015-11-25) and a decline in weekly jobless claims (http://www.marketwatch.com/story/us-jobless-claims-drop-12000-to-260000-2015-11-25) -- were mostly positive, underscoring expectations the U.S. Federal Reserve will start raising interest rates in December.

"A December rate increase has been factored in. The focus is on when would be the next and how fast they were going to raise rates subsequently," said Osao Iizuka, head of FX trading at Sumitomo Mitsui Trust Bank. "And they wouldn't be in a hurry."

The dollar was at Yen122.57, compared with Yen122.70 late Wednesday in New York. The euro was at $1.0611, compared with $1.0625 Thursday, when the greenback hit a fresh seven-month low against the shared currency.

The market's nearer-term focus is on the European Central Bank's policy meeting on Dec. 3. Iizuka said because the euro has factored in the prospect of additional easing steps from the ECB next week, the pair could rise if the ECB underwhelms market participants.

The euro fell below $1.06 on Wednesday after a Reuters report (http://www.marketwatch.com/story/euro-falls-on-report-ecb-considers-broadening-out-qe-bond-buys-2015-11-25) said ECB policy makers were looking at widening the scope of their bond-buying program or implementing a two-tier penalty charge on banks that leave cash with the central bank.

The ECB has signaled its readiness to expand its bond purchase program to combat weak inflation. The euro has lost 4% against the dollar over the past month. The central bank earlier this year launched a 1.1-trillion-euro ($1.18 trillion) asset-buying program.

Aussie: The Australian dollar fell to 72.21 U.S. cents from 72.51 U.S. cents following data showing poor business investment in the country. Australian companies scaled back investment spending by 9.2% in the third quarter from the second, a much steeper drop than the 2.9% fall expected. In the year through September, total new capital expenditure fell by 20.0%.

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(END) Dow Jones Newswires

November 26, 2015 06:48 ET (11:48 GMT)