Investing.com - The dollar held gains against the other major currencies on Tuesday, as the previous session's strong U.S. data continued to support and as market volatility eased after China cut interest rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.43% at 94.33.
The dollar was higher against the yen, with USD/JPY up 0.40% to 119.34.
The dollar remained supported after the U.S. Conference Board said on Tuesday that its index of consumer confidence jumped to a seven-month high of 101.5 this month from a reading of 91.0 in July.
The greenback was also boosted after the People’s Bank of China cut interest rates by 25 basis points to 4.6% on Tuesday, in a bid to bolster economic growth after a plunge in the country’s stock market.
The dollar was also higher against the euro, with EUR/USD dropping 0.44% to 1.1467.
The single currency has been boosted in recent sessions as investors fled to the relative safe-haven currencies amid intense volatility in markets.
Demand for the euro was also underpinned by investors borrowing the low-yielding currency to fund investment in risk assets.
But concerns over whether a free fall in China’s stocks will make the world’s second-largest economy weaker persisted. Shares in Shanghai opened higher on Wednesday, before ending down 1.3% in a volatile session.
Recent steep declines in Chinese equity markets have sparked fears that they will hasten an economic downturn and undermined investor confidence in the government’s ability to revitalize economic growth.
The turmoil in markets began when China unexpectedly devalued the yuan on August 11, sparking fears over the condition of the economy.
The dollar was higher against the pound and the Swiss franc, with GBP/USD down 0.24% at 1.5652 and with USD/CHF rising 0.34% to 0.9423.
The Australian and New Zealand dollars were higher, with AUD/USD up 0.15% at 0.7140 and with NZD/USD climbing 0.42% to 0.6501.
The Antipodean currencies are sensitive to news out of China, a top export market for Australia and New Zealand.
Meanwhile, USD/CAD was down 0.30% to 1.3295, extending its pullback from Tuesday's 11-year high of 1.3298.