Investing.com - The dollar steadied on Tuesday after falls in the previous session as investors looked ahead to upcoming U.S. economic reports and Wednesday’s OPEC meeting for a potential agreement on output cuts.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 101.33.
On Thursday, the index surged to highs of 102.07, a level not seen since April 2003.
Investors were waiting on a raft of U.S. data, including a second look at third quarter growth later in the day, ISM manufacturing data on Thursday and Friday’s nonfarm payrolls report for November.
Upbeat data would further feed into expectations for an interest rate hike by the Federal Reserve next month.
According to Investing.com's Fed Rate Monitor Tool, 97.8% of traders expect the Fed to raise interest rates at its policy meeting in December.
Higher rates typically support the dollar by making the currency more attractive to yield-seeking investors.
Traders were also keeping an eye on oil prices as they assessed the likelihood that OPEC members would reach a deal on output cuts ahead of Wednesday’s key meeting.
A production cut would prop up oil prices and bolster the currencies of oil exporting countries such as Canada and Russia.
The dollar pushed higher against the yen, with USD/JPY rising 0.3% to 112.27, well below the eight-month high of 113.89 set on Friday.
The euro remained under pressure, with EUR/USD at 1.0612.
Sentiment on the single currency was hit by concerns over the health of Italy’s banking system ahead of an upcoming constitutional referendum on December 4, which could see the government resign.
Sterling was little changed against the dollar, with GBP/USD at 1.2414.