Investing.com - The dollar was broadly higher against a basket of other major currencies on Monday, as Friday's upbeat U.S. economic reports added to hopes that the Federal Reserve will soon raise interest rates.
Market participants were also looking ahead to the outcome of the Fed’s latest policy meeting on Wednesday for a clear signal on when it could start to raise interest rates.
Upbeat data on U.S. consumer sentiment on Friday underlined expectations that the central bank could start to hike rates at its September meeting.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.29% at 95.52.
EUR/USD slid 0.31% to 1.1226 after talks in Brussels between Greece and European Union representatives failed to reach an agreement on pension reforms, budget targets and tax rates, adding to fears over a debt default that would threaten Greece’s future in the euro zone.
Europe wants Greece to make spending cuts worth €2 billion, to secure a deal that will unlock additional funds before its bailout expires at the end of June and it must repay €1.6 billion to the International Monetary Fund.
EU officials blamed the collapse in talks on Greece, saying it had failed to offer any new reforms to secure the funding it needs.
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.
The pound was also lower, with GBP/USD declining 0.39% to 1.5498 after ratings agency Standard & Poor’s downgraded its outlook on the U.K.'s sovereign rating to negative on Friday, citing concerns over the government’s decision to hold a referendum on EU membership by 2017.
There is at least a one-in-three probability that the U.K. will lose its AAA rating within the next two years, S&P warned.
Elsewhere, the dollar was higher against the yen and the Swiss franc, with USD/JPY up 0.13% to 123.58 and with USD/CHF gaining 0.30% to 0.9313.
In Switzerland, official data earlier showed that retail sales increased at an annualized rate of 1.6% in April, confounding expectations for a 2.2% decline, after a 2.8% drop the previous month.
The Australian dollar was steady, with AUD/USD at 0.7727, while NZD/USD fell 0.24% to nearly five-year lows of 0.6970.
Meanwhile, USD/CAD rose 0.37% to trade at 1.2355.