The U.S. dollar moved up against its most major counterparts in the European session on Thursday, buoyed by a spike in treasury yields, as expectations for a rate hike in March intensified following the release of the minutes from the Federal Reserve's monetary policy meeting in December.

The benchmark yield on the 10-year note touched 1.71 percent, its highest level since March 2021. Yields move inversely to bond prices.

The minutes showed that the central bank is prepared for earlier and faster rate hikes in the wake of an improvement in the labour market and elevated inflation pressures.

"Participants generally noted that, given their individual outlooks for the economy, the labor market, and inflation, it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated," the minutes stated.

Policy makers also agreed to accelerate tapering of bond purchases and end it in March.

According to the CME Group's FedWatch Tool, investors are pricing in a 71.4% probability of a 25 basis point rate hike in March.

Investors now await U.S. nonfarm payrolls due on Friday for more direction.

Nonfarm payrolls are expected to rise by 400,000 jobs in December, with the unemployment rate falling to 4.1 percent from 4.2 percent.

The greenback was up at a 2-day high of 1.3490 against the pound and a 3-day high of 0.9200 against the franc, off its previous lows of 1.3559 and 0.9155, respectively. Next likely resistance for the greenback is seen around 1.32 against the pound and 0.94 against the franc.

The greenback gained to 1.1285 against the euro, but it has since eased to 1.1327. The pair was worth 1.1312 at Wednesday's close.

Reversing from its prior lows of 0.7223 against the aussie, 0.6796 against the kiwi and 1.2749 against the loonie, the greenback firmed to a fresh 2-week high of 0.7146, more than 2-week high of 0.6734 and an 8-day high of 1.2814, respectively. The greenback may face resistance around 0.70 against the aussie, 0.66 against the kiwi and 1.30 against the loonie.

The greenback, however, fell to 115.66 against the yen as the latter got a lift amid safe-haven demand. If the greenback slides further, 112.00 is possibly seen as its next support level.

Looking ahead, German preliminary CPI for December is scheduled for release at 8:00 am ET.

U.S. weekly jobless claims for the week ended January 1, ISM non-manufacturing PMI for December, factory orders for November and U.S. and Canadian trade data for the same month will be released in the New York session.

Euro vs US Dollar (FX:EURUSD)
Forex Chart
From Apr 2022 to May 2022 Click Here for more Euro vs US Dollar Charts.
Euro vs US Dollar (FX:EURUSD)
Forex Chart
From May 2021 to May 2022 Click Here for more Euro vs US Dollar Charts.