The dollar was steady against a basket of the other major currencies on Tuesday as investors remained confident that the Federal Reserve will hike interest rates at next week’s meeting while they awaited Friday’s U.S. jobs report.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 101.64 at 08.49 GMT, holding above Monday’s one-week low of 101.22.
A rate hike at the Fed’s March 14-15 meeting is seen as a near certainty after Fed Chair Janet Yellen said last week that a rate hike “would likely be appropriate” this month if employment and inflation continued to evolve in line with expectations.
Futures traders are pricing in around an 86% chance of a hike at the Fed’s next meeting, according to Investing.com’s Fed Rate Monitor Tool.
The dollar was steady against the yen, with USD/JPY at 113.83, after falling to a one-week low of 113.54 on Monday as rising geopolitical tensions in the wake of a North Korean missile test spurred safe haven demand for the Japanese currency.
The euro edged higher, with EUR/USD inching up 0.1% to 1.0591, still shy of Monday’s two-week highs of 1.0639.
Investors were continuing to monitor developments in the French presidential election campaign after scandal-hit Francois Fillon won his party’s backing to be its candidate after former French Prime Minister Alain Juppe ruled himself out of the race.
Outgoing President Francois Hollande was warned that far-right candidate Marine Le Pen could win the election and vowed to “do everything” in his power to stop it happening.
Investors’ fears that a victory for anti-EU Le Pen could potentially trigger a French exit from the euro zone.
The euro showed little reaction to data showing that German factory orders fell at the fastest rate in eight years in January, slumping 7.4%.
Sterling was weaker against the dollar, with GBP/USD down 0.21% to 1.2211.
Meanwhile, the Australian dollar was higher after the country’s central bank kept interest rates on hold on Tuesday and gave no indications that it is considering further easing.
AUD/USD was up 0.29% to 0.7602 after initially rising as high of 0.7633.