Investing.com - The dollar pushed higher against the other major currencies on Tuesday as investors looked ahead to a speech from Federal Reserve Chair Janet Yellen later in the day amid uncertainty over the timing of the next U.S. interest rate hike.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.22% at 96.20, holding below Monday’s one-and-a-half week highs of 96.42.
The dollar slid late Monday as soft data on U.S. consumer spending and inflation prompted the Atlanta Fed to revise down its estimates for first quarter growth.
The Atlanta Fed lowered its first quarter growth estimate to 0.6% from 1.4%.
Personal spending edged up 0.1% in February the Commerce Department said, in line with economists’ expectations, but January’s spending was revised down sharply.
Meanwhile, inflation as measured by the PCE index, the Fed’s preferred inflation measure, dipped 0.1% last month and was up just 1% from a year earlier.
The data indicated that the Fed may raise interest rates only gradually this year, despite the tightening labor market.
The euro slipped lower, with EUR/USD easing 0.14% to 1.1181.
The dollar was also higher against the yen, with USD/JPY rising 0.21% to 113.68.
The yen remained under pressure after Japanese Prime Minister Shinzo Abe said on Tuesday he will proceed with a planned sales tax hike next April unless the economy is hit by a severe shock.
Many analysts had expected Abe to delay the planned tax hike which could threaten Japan’s fragile economic recovery.
The pound weakened, with GBP/USD down 0.32% to 1.4209, off Monday’s almost one-week highs of 1.4281.
The commodity linked currencies were also broadly lower, with AUD/USD losing 0.24% to trade at 0.7526, NZD/USD up 0.16% at 0.6734 and USD/CAD rising 0.2% to 1.3213.