Investing.com - The dollar was trading at two-week highs the other major currencies on Tuesday, underpinned by expectations that the Federal Reserve is moving closer to hiking U.S. interest rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.32% at 95.84.
Speaking Tuesday, Fed Vice Chairman Stanley Fischer said the U.S. labor market is almost at full strength and the pace of interest rate increases will be data dependent.
The comments came during an interview with Bloomberg TV as investors looked ahead to the nonfarm payrolls report for July, scheduled for Friday.
The dollar had already strengthened after Fed Chair Janet Yellen said in a speech at Jackson Hole last Friday that the case for raising U.S. interest rates has strengthened in recent months, citing improvements in the labor market and hopes for modest economic growth.
The U.S. central bank raised interest rates for the first time in almost a decade in December.
Expectations of higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.
The euro was at two-week lows, with EUR/USD down 0.24% to 1.1161.
The dollar was trading at three-week highs against the yen, with USD/JPY up 0.48% to 102.41.
Earlier in the day, Japan's chief cabinet secretary indicated that Tokyo is still prepared to intervene in the market to weaken the yen if necessary, despite recent gains in the Japanese currency.
Sterling was trading near one-week lows, with GBP/USD at 1.3094.
In the U.K., data on Tuesday showed that banks approved the lowest number of mortgages in July since January 2015, while consumer credit recorded the weakest increase since August 2015.
The data was in contrast to other recent reports indicating the economy has shrugged off uncertainty caused by the Brexit vote.