Investing.com - The dollar was trading at three-week highs the other major currencies on Wednesday, as solid U.S. private sector hiring data underpinned expectations for higher 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 0.15% at 96.19, the strongest level since August 9.
The U.S. private sector added 177,000 jobs in July, payrolls processor ADP said, compared to expectations for jobs growth of 175,000.
The report came as investors looked ahead to the nonfarm payrolls report for July, scheduled for Friday.
Speaking Tuesday, Federal Reserve 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 dollar has strengthened since Fed Chair Janet Yellen said late last week that the case for raising U.S. interest rates has strengthened in recent months, citing improvements in the labor market.
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 0.13% to 1.1129.
In the euro zone, weaker than expected inflation data added to pressure on the European Central Bank to step up stimulus measures ahead of next week’s policy meeting.
The dollar was also stronger against the yen, with USD/JPY up 0.38% to 103.35, the most since July 29.
Sterling eased off one-week lows, with GBP/USD rising 0.23% to 1.3109.
British mortgage lender Nationwide said Wednesday that increases in house prices picked up in August, indicating that the housing market remained resilient after the June 23 Brexit referendum.