Investing.com - The dollar edged higher against a basket of other major currencies on Tuesday, but gains were expected to remain limited as sentiment on the greenback remained fragile following reported remarks by U.S. President Barack Obama.
Sentiment on the greenback remained vulnerable following rumors on Monday that President Obama told the G7 summit in Germany that the strong dollar was "a problem."
The dollar had strengthened broadly after a strong U.S. jobs report on Friday bolstered expectations that the Federal Reserve will hike interest rates later this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 011% at 95.32.
EUR/USD slipped 0.27% to 1.1260 as investors also remained cautious after German Chancellor Angela Merkel warned Monday that "there isn’t much time left" to reach an agreement on a cash-for-reforms deal needed to unlock more financial aid before Greece runs out of money.
Athens delayed a key debt payment to the International Monetary Fund on Friday, saying it would repay the money along with other payments due this month by the end of June.
Athens submitted new proposals for economic reforms to the European Commission on Tuesday, fuelling hopes for a breakthrough that could unlock new funding before the country runs out of money.
Greek Prime Minister Alexis Tsipras said the two sides could reach a deal if Greece’s creditors dropped demands to cut pensions and other proposals which would push Greece deeper into recession.
Also Tuesday, data confirmed that the euro area economy grew 0.4% in the first three months of the year. But the Greek economy contracted 0.2% in the quarter, sending the country back into a recession.
The pound was also lower, with GBP/USD down 0.32% to 1.5300 after the Office for National Statistics said the U.K. trade deficit narrowed to £1.2 billion in April, the lowest since March 2014 from an upwardly revised £3.1 the previous month.
Sterling also remained under pressure as concerns over the prospect of a possible British exit from the European Union weighed ahead of a referendum on EU membership due to be held before the end of 2017.
Elsewhere, USD/JPY slid 0.37% to 124.03, pulling further away from Friday's 13-year highs of 125.84, while USD/CHF edged up 0.10% to 0.9284.
The Australian and New Zealand dollars were weaker, with AUD/USD shedding 0.31% to 0.7679 and with NZD/USD edging down 0.16% to 0.7133.
Meanwhile, USD/CAD slipped 0.12% to trade at 1.2394.