The US dollar has gained ground against other major currencies after strong sales of new US homes triggered fresh talk the Federal Reserve will wind down stimulus.

The euro bought $US1.3199 around 2100 GMT (0700 AEST) falling from $1.3224 on Tuesday.

The dollar also rose against the Japanese yen, trading at 100.26 yen compared with 99.43 yen the prior day.

The euro climbed to 132.34 yen from 131.50 yen.

The euro had strengthened in early European trading, boosted by a positive eurozone economic report, but then succumbed to a resurgence in the dollar.

The greenback caught support from a government report of an unexpectedly strong surge in sales of US new homes in June, which hit their highest pace in five years.

“The US dollar pared the decline from earlier this week as new-home sales in the world’s largest economy jumped 8.3 per cent in June,” said David Song, currency analyst at DailyFX.

“The reserve currency may track higher over the remainder of the week as the fundamental developments coming out of the US continue to highlight an improved outlook for growth,” he added.

The encouraging June numbers for the housing market, a bright spot in the sluggish US recovery, revived speculation the Fed will begin to unwind its $85 billion-a-month bond-purchase program.

“The growing arguments for the Federal Reserve to taper its asset-purchase program should spark a bullish reaction in the reserve currency,” Song said.

The Fed has signalled it would begin to taper the stimulus if the economy continued to improve.

The US dollar also gained against the Swiss and British currencies.

The pound fetched $US1.5311, down from $US1.5376 on Tuesday.

The US dollar rose to 0.9373 Swiss francs from 0.9347 francs.