Investing.com - The dollar was broadly higher against a basket of other major currencies on Wednesday, as growing expectations for a U.S. rate hike in the coming months continued to support the greenback and as investors eyed upcoming U.S. economic reports.
Demand for the dollar continued to be underpinned as investors turned their attention to the latest U.S. jobs report, due out on Friday, which was expected to support expectations for higher interest rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 98.75, close to Tuesday's seven-day high of 99.00.
EUR/USD edged up 0.14% to 1.0747 after data showing manufacturing activity across the euro zone grew at the fastest pace since last May in March indicated that the recovery in the region is continuing to gain traction.
Research firm Markit said the euro zone manufacturing purchasing managers' index rose to a 10-month high of 52.2, higher than the preliminary reading of 51.9.
The pound was lower, with GBP/USD down 0.41% to 1.4757 even as data showed that the U.K. manufacturing sector expanded at the fastest rate in eight months in March.
Markit said its manufacturing PMI rose to 54.4 in March from 54.0 in February, boosted by strong domestic demand. Economists had forecast an increase to 54.3.
Elsewhere, the dollar was steady against the yen, with USD/JPY at 120.22 and lower against the Swiss franc, with USD/CHF edging down 0.17% to 0.9708.
The yen strengthened mildly after the Bank of Japan's tankan business sentiment survey showed that sentiment among Japan's large manufacturers held steady in the first quarter but is expected to deteriorate in the current quarter.
The Australian, New Zealand and Canadian dollars were broadly weaker, with AUD/USD slipping 0.12% to 0.7595 and NZD/USD dropping 0.71% to 0.7417, while USD/CAD added 0.12% to trade at 1.2697.
Statistics Australia reported on Wednesday that building approvals fell 3.2% in February, compared to expectations for a 4.0% decline. January's figure was revised to a 5.9% increase from a previously estimated 7.9% gain.
The export-related currencies found support earlier, after data showed that manufacturing activity in China swung back into expansion territory last month. China's manufacturing PMI rose to 50.1 in March from a reading of 49.9 the previous month, confounding expectations for a slip to 49.7.
Later in the day, the U.S. was to release the ADP nonfarm payrolls report, while the Institute of Supply Management was to release data on manufacturing activity.