By Riva Gold

Investors paused for breath Thursday after Wall Street climbed to record highs for a third consecutive session.

The WSJ Dollar Index added less than 0.1%, while the Stoxx Europe 600 inched up 0.3% in low volume afternoon trading, following a mixed session in Asia.

U.S. markets were closed for Thanksgiving.

The Dow Jones Industrial Average, the S&P 500 and the Russell 2000 all closed at record highs Wednesday, while the dollar reached its highest close since 2002 against a basket of currencies on expectations for stronger U.S. growth and higher interest rates.

"The reflationary theme is sucking money back into the U.S. stock market and injecting huge shock waves through foreign exchange markets," said Jane Foley, currency strategist at Rabobank, referring to expectations that tax cuts and less regulation will boost corporate profits and U.S. growth.

Major U.S. indexes have all risen 3-5% so far this month.

The latest leg higher followed strong U.S. economic data Wednesday, including durable goods orders, a measure of consumer sentiment and fresh hints the Federal Reserve would likely raise interest rates in December.

Fed officials said a rate rise was possible "relatively soon" if incoming data continued to show an improving economy, minutes from the bank's November meeting showed.

U.S. government bonds sold off Wednesday, sending the 10-year Treasury yield to its highest since July 2015, while the Dow, S&P 500 and Russell 2000 notched record closing highs for the 16th, 13th and eighth time this year respectively.

"The market is bringing us into line with what the Fed was telling us anyway," said James Athey, investment manager at Aberdeen Asset Management.

Even ahead of the election, central banks had softened their dovish stance, and murmurs about fiscal policy and infrastructure spending were starting to raise expectations for growth and inflation.

"That narrative was nascent leading up to Trump, and he just turbocharged it," Mr. Athey said.

On Thursday, markets in Asia mostly moved lower amid concerns that higher U.S. interest rates and a stronger dollar could hurt emerging markets and worsen capital flight from Asia. South Korea's KOSPI index fell 0.8%, while Hong Kong's Hang Seng Index fell 0.3%.

Japan's Nikkei Stock Average added 0.9%, however, advancing for a sixth straight day to its highest level since January, as a weaker yen boosted shares of exporters.

The dollar was last up 0.5% against the yen at Yen113.1580 after rising to as high as Yen113.5310 earlier. The yen has fallen over 7% against the dollar so far this month.

The euro inched up 0.3% against the dollar to $1.0567 on Thursday after closing at its lowest against the dollar since March 2015, pressured both by the appreciation of the dollar and concerns over political risks in the eurozone.

The European Central Bank said Thursday that the currency area's economy could be affected by U.S. trade policy changes and possible spillover effects from higher inflation and U.S. interest rate expectations.

Economic policies introduced by President-elect Donald Trump "will likely become more inward-oriented," the ECB wrote in its biannual Financial Stability Review.

In bond markets, the yield on the 10-year German government bond fell to 0.243% from 0.277% on Wednesday. 10-year Japanese government bond yields fell to 0.033%. Yields move inversely to prices.

Willa Plank and Tom Fairless contributed to this article

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

November 24, 2016 10:59 ET (15:59 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.