Investing.com - The dollar traded largely higher against most major currencies on Tuesday after investors digested solid U.S. inflation and existing home sales numbers and determined the U.S. economy continues to improve and is in need of less support from the Federal Reserve.
In U.S. trading on Tuesday, EUR/USD was down 0.43% at 1.3466.
The Labor Department reported earlier that the U.S. consumer price index rose 2.1% in June, unchanged from the previous month and in line with forecasts, which drew applause for the dollar.
On a month-over-month basis, U.S. consumer prices were up 0.3% after a 0.4% increase in May, also in line with expectations.
Figures that met but did not exceed Wall Street expectations bolstered the dollar, as a strong upside surprise could have rattled nerves and sent many investors rethinking what the Federal Reserve will do with monetary policy, thus creating uncertainty.
Market talk points to the Fed ending its bond-buying program around October and then raising interest rates some time in 2015, though the length of time that will pass between those two policy moves remains up in the air.
June's core inflation rate, which excludes food and energy costs, rose by just 0.1% from May and 1.9% on year, slightly below market calls for 0.2% and 2.0% readings, respectively, which illustrated how gasoline was driving the CPI up, though markets viewed the numbers as fundamentally healthy anyway.
Elsewhere, the National Association of Realtors reported earlier that existing U.S. home sales rose 2.6% to 5.04 million units in June from 4.91 million in May, beating market forecasts for a 2.0% rise to 4.97 million units.
The euro, meanwhile, continued to soften over ongoing market sentiments that the European Central Bank has room to loosen policy if needed.
The dollar was up against the yen, with USD/JPY up 0.05% at 101.45, and up against the Swiss franc, with USD/CHF up 0.48% at 0.9024.
The greenback was up against the pound, with GBP/USD down 0.10% at 1.7060.
In the U.K., the Confederation of British Industry said that its index for industrial order expectations declined to 2 this month from 11 in June, missing expectations for a fall to 8.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.01% at 1.0737, AUD/USD up 0.18% at 0.9391 and NZD/USD down 0.31% at 0.8663.
Reserve Bank of Australia Governor Glenn Stevens said earlier he felt comfortable with interest rates at their current levels, prompting investors to downplay the chance of rate cuts later this year.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.31% at 80.87.