Investing.com - The dollar moved higher against a basket of the other major currencies on Wednesday as comments by Federal Reserve officials underlined expectations for a rate hike this month.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.34% at 101.67 at 08.56 GMT.
The dollar was boosted as remarks by several Fed policymakers offset disappointment among investors that U.S. President Donald Trump’s speech to Congress offered few details on his plans for infrastructure spending and tax reforms.
Trump vowed to pursue massive tax relief for the middle class but stopped short of giving details.
New York Fed President William Dudley said Tuesday that the case for tightening monetary policy "has become a lot more compelling".
Meanwhile, San Francisco Fed President John Williams said that a rate increase was very much on the table for serious consideration at the March meeting.
The remarks came as data on Tuesday showed that the U.S. economy grew 1.9% in the fourth quarter, in line with the preliminary estimate, but falling short of economist expectations for an upward revision to 2.1%.
Fed fund futures are pricing in about a 70% chance of a rate hike in March, according to Investing.com’s Fed Rate Monitor Tool, up from around 25% at the start of the week. Odds of a May increase was seen at 74%, while June odds were at around 85%.
The dollar was higher against the euro, with EUR/USD down 0.36% at 1.0539.
The single currency remained under pressure amid concerns over the prospects of a Brexit or Trump style shock result in France’s upcoming presidential election.
The dollar was higher against the yen, with USD/JPY climbing 0.77% to 113.61.
Sterling was little changed with GBP/USD at 1.2381 ahead of UK manufacturing figures for February.
The Australian dollar was steady, with AUD/USD at 0.7659 after data showing that activity in China’s manufacturing sector accelerated at a faster than expected rate in February. China is Australia’s largest export market.
The New Zealand dollar was weaker, with NZD/USD down 0.83% at 0.7131.