The US dollar rose against its major counterparts on Tuesday, after a Federal Reserve official made comments that increased US Treasury yields and supported the US Currency.
Philadelphia Federal Reserve Bank President Patrick Harker said during an interview that an interest rates hike next month is still on the table. He indicated that the decision to raise rates will depend on economic releases ahead of the meeting of the Federal Open Market Committee that starts on March 14.
The Federal Reserve official said that employment data, inflation rate, and consumer price growth are among the main factors that will be used to decide the monetary policy. Harker had previously said that he backs three interest rate increases in 2017. Expectations of higher interest rates supported the dollar today, as higher rates make dollar assets more valuable to investors seeking yields.
Looking ahead, traders are anticipating the minutes of the latest meeting of the Federal Open Market Committee, which is due to be released on Wednesday. Signals of a more hawkish outlook toward raising rates, if any are found, will lift the US dollar higher.
EUR/USD traded at 1.0544 as of 17:45 GMT on Tuesday, from 1.0525 as of 14:35 GMT, the lowest level for the pair since January 11. EUR/USD started trading today at 1.0608.
The Dollar Index, which tracks the performance of the US currency against a basket of its major peers, was at 101.39 as of 17:35 GMT, from 100.95 on Monday.
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