Investing.com - The dollar remained broadly supported against a basket of other major currencies on Monday, trading at 11-1/2 year highs as expectations for a near-term U.S. rate hike continued to support the greenback and as trading volumes remained light with no major U.S. data ahead.
The dollar remained broadly supported after the latest U.S. jobs report heigthened expectations for higher interest rates.
The Federal Reserve is expected to begin raising interest rates around the middle of this year and investors were looking ahead to next week’s policy statement to see if it would drop its reference to being patient before raising rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, climbed 0.80% to 99.40, the strongest since September 2003.
The euro dropped to 12-year lows against the dollar, with EUR/USD tumbling 0.99% to 1.0590.
The euro came under broad selling pressure after the European Central Bank began purchasing securities on Monday as part of an asset-buying program amounting to €60 billion a month.
Concerns over the situation in Greece also weighed, as the eurogroup of finance ministers continued talks in Brussels to discuss a reform package put forward by Greece as part of its bailout review.
Germany’s finance minister Wolfgang Schaeuble warned Tuesday that Greece must stop wasting time and start developing its reform package.
The dollar was higher against the yen and the Swiss franc, with USD/JPY up 0.23% to 121.40, just below Tuesday's two-month high of 122.02, while USD/CHF advanced 0.73% to a one-and-a-half month high of 1.0069.
Sterling dropped to eight-month lows, with GBP/USD down 0.59% to 1.4980 after the U.K. Office for National Statistics said that manufacturing production declined 0.5% in January, disappointing expectations for an increase of 0.2% and following a 0.1% gain in December.
On an annualized basis, manufacturing production rose at rate of 1.9% in January, below expectations for a gain of 2.6%, after rising at a rate of 2.6% the previous month.
The report also showed that industrial production fell 0.1% in January, compared to expectations for a 0.2% gain, after declining 0.2% in December.
AUD/USD declined 0.52% to six-year lows at 0.7583 and NZD/USD dropped 0.69% to 0.7223. The Aussie came under pressure after the Westpac Banking Corporation earlier reported that Australia's consumer sentiment fell 1.2% this month, after an increase of 8.0% in February.
Separately, the Australian Bureau of Statistics said that home loans dropped 3.5% in January, compared to expectations for a 2.0% fall, after a 2.7% rise the previous month.
Meanwhile, USD/CAD climbed 0.50% to trade at 1.2750.