Dollar gains

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NEW YORK: The dollar gained against a basket of currencies on Thursday, hitting its strongest level in two months as encouraging data on U.S. jobs reinforced the view the Federal Reserve would raise interest rates at the end of the year.

Sterling on the other hand fell to a fresh 31-year low versus the greenback on renewed anxiety about the repercussion from Britain's "hard" exit from the European Union. First-time filings for U.S. jobless benefits unexpectedly fell to a near 43-year low, the U.S. Labor Department said.

The claims figures came ahead of the government's payrolls report due at 8:30 a.m.a (1230 GMT) on Friday, in which analysts polled by Reuters forecast a hiring of 175,000 workers in September.

"It looks like the U.S. economy is righting itself at the end of the third quarter," said Christopher Vecchio, currency analyst at DailyFX in New York. The growing spread between U.S. and German bond yields has also bolstered the greenback. The difference between two-year U.S. and German government debt hovered at 1.51 percentage points on Thursday, its widest in a decade.

The dollar index was last up 0.5 percent at 96.552 after touching its highest level since early August.