Investing.com - The dollar remained supported on Tuesday as upbeat U.S. jobs data underpinned hopes for a Federal Reserve rate hike before the year’s end, while the New Zealand dollar was steady ahead of a rate review by the country’s central bank.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.1% at 96.4, well above last week’s lows of 94.94.
The Labor Department reported Friday that the U.S. economy added far more jobs than expected last month, boosting the outlook for the U.S. economy and renewing hopes that the Fed could raise interest rates this year.
Investors were looking ahead to Friday’s data on U.S. retail sales for a fresh indication on the timing of a possible rate hike before the end of this year.
Higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.
The euro edged lower in quiet trade, with EUR/USD easing 0.1% to 1.1074.
The dollar slid lower against the yen, with USD/JPY down 0.26% at 102.17.
The pound fell to one-month lows, with GBP/USD down 0.5% at 1.2971 after Bank of England policymaker Ian McCafferty said more monetary easing would be required if the economy worsens.
The BoE cut interest rates to record lows last week and implemented a larger then expected monetary stimulus program to cushion the U.K. economy from the fallout from the Brexit vote.
The New Zealand dollar was steady, with NZD/USD at 0.7138 ahead of the Reserve Bank of New Zealand’s monetary policy meeting, amid heightened expectations for a rate cut.
Its Australian counterpart was also little changed, with AUD/USD at 0.7652.