Investing.com - The dollar edged higher against the other major currencies on Wednesday, hovering close to a one-month peak as optimism over the U.S. economy continued to support demand for the greenback.
USD/JPY rose 0.29% to 114.35.
The greenback remained supported after data on Tuesday showed that the Institute for Supply Management's manufacturing index rose more than expected last month.
In addition, U.S construction spending rose to the highest level since October 2007, in January, indicating that the economy is regaining momentum after slowing in the fourth quarter.
The reports underlined expectations that the Federal Reserve will hike interest rates again this year.
EUR/USD held steady at 1.0860.
The euro remained under pressure after weak euro zone inflation and factory data earlier in the week cemented expectations for more easing by the European Central Bank at its upcoming meeting on March 10.
The dollar was little changed against the pound, with GBP/USD at 1.3947 and was fractionally higher against the Swiss franc, with USD/CHF up 0.08% at 0.9983.
Earlier Wednesday, data showed that the Markit construction purchasing managers' index fell to 54.2 from January’s 55.0. Economists had expected the index to tick up to 55.5.
It was the slowest increase in overall construction output since April 2015.
Meanwhile, the Australian dollar was stronger, with AUD/USD up 0.47% at 0.7208, while NZD/USD declined 0.47% to 0.6596.
The Aussie was boosted after the Australian Bureau of Statistics said that gross domestic product grew 0.6% in the fourth quarter, beating expectations for 0.4%. The economy grew 1.1% in the third quarter, whose figure was revised from a previously estimated growth rate of 0.9%.
Year-on-year, Australia’s economy grew 3.0% in the last quarter, above expectations for 2.5%.
USD/CAD climbed 0.42% to 1.3463.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.13% at 98.48, just below the previous session’s one-month high of 98.59.