Investing.com - The dollar was broadly higher against a basket of other major currencies on Tuesday, despite the previous session's downbeat U.S. data as markets awaited upcoming U.S. housing reports and the Federal Reserve's monthly policy meeting.
The dollar found support despite data on Monday showing that U.S. industrial production fell unexpectedly last month.
Market participants were looking ahead to the outcome of the Federal Reserve's latest policy meeting on Wednesday for a clear signal on when it could start to raise interest rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.22% at 95.27.
EUR/USD fell 0.24% to 1.1258 as sentiment on the euro remained vulnerable after talks between Greece and European officials ended without an agreement on a cash-for-reforms deal over the weekend, fueling fears over a debt default that would threaten Greece’s future in the euro zone.
European Central Bank President Mario Draghi said Monday that a Greek default would be “uncharted waters,” but added that he believes policymakers have all the tools to manage the situation.
Investors were looking ahead to a meeting of euro zone finance ministers on Thursday, which was being seen as Greece's last chance to strike a deal.
Earlier Tuesday, the ZEW Centre for Economic Research said that its index of German economic sentiment tumbled by 10.4 points to 31.5 this month from May’s reading of 41.9. Analysts had expected the index to drop by 4.8 points to 37.1 in June.
The pound was also lower, with GBP/USD down 0.12% to 1.5579 after the U.K. Office for National Statistics said the annual rate of consumer inflation ticked up 0.1% in May, in line with forecasts, following a 0.1% decline in April. Consumer prices were up 0.2% from a month earlier, also in line with forecasts.
Underlying inflation, which strips out food and fuel costs rose 0.9% last month, slightly below forecasts for an increase of 1.0%.
The report also showed that the U.K. house price index rose just 5.5% in April, below forecasts for a gain of 10.2% and down from 9.6% in March.
Elsewhere, the dollar was higher against the yen and the Swiss franc, with USD/JPY up 0.09% to 123.51 and with USD/CHF rising 0.23% to 0.9316.
The Australian and New Zealand dollars were weaker, with AUD/USD sliding 0.38% to 0.7736 and with NZD/USD down 0.26% to nearly five-year lows at 0.6980.
The Aussie came under pressure after, in the minutes of its June policy meeting released on Tuesday, the Reserve Bank of Australia reaffirmed that it would consider further cuts if necessary.
The minutes also said that the Australian dollar needs "further depreciation."
Meanwhile, USD/CAD edged up 0.14% to trade at 1.2340.