Dollar Steady Against Rivals as Rate Hike Expectations Grow

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The dollar edged slightly higher against a basket of currencies on Tuesday, as expectations continued to grow that the Federal Reserve will raise U.S. interest rates in the near term with some analysts projecting the rate hike to come as early as July.

USD/JPY held steady at 111.15, a hair below Monday’s three-week peak of 111.44.

The dollar continues to be broadly supported following Federal Reserve chairwoman Janet Yellen’s statement that hinted of a rate increase, but the yen also strengthened after fresh data revealed that Japanese factory output went up in April.

EUR/USD didn’t change much at 1.1147, but was off Monday’s low of 1.1097.

The dollar held steady against the pound, with GBP/USD trading at 1.4640 and lower against the Swiss franc, with USD/CHF slipping 0.14% at 0.9907.

Meanwhile, the Australian and New Zealand dollars outperformed their American rival, with AUD/USD gaining 0.92% at 0.7249 and with NZD/USD adding 0.76% to 0.6746.

Building approvals in Australia rose by 3.0% in April according to the country’s Bureau of Statistics. Projections were for a 3.0% drop.

In New Zealand, data revealed that the ANZ business confidence index rose to 11.3 this month from a reading of 6.2 in April.

Elsewhere, USD/CAD tacked on 0.19% to trade higher at 1.3072 after the latest data showed that Canada’s gross domestic product declined by 0.2% in March, compared to projections for a 0.1% drop.

The U.S. dollar index was steady at 95.64, still within range of the previous session’s two-month highs of 95.96.

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