Investing.com - The dollar held steady at a two-month peak against the other major currencies on Monday, as comments by Federal Reserve Chair Janet Yellen signaling the possibility for upcoming rate hikes continued to support demand for the greenback.
Trade volumes looked likely to remain light on Monday with financial markets in the U.K. shut for a public holiday and U.S. markets closed for Memorial Day.
USD/JPY climbed 0.72% to a one-month high of 111.15.
The greenback strengthened broadly after Fed Chair Yellen said Friday it would be appropriate for the central bank to raise rates “gradually and cautiously” in the coming months if the economy and the labor market continue to pick up as expected.
The U.S. dollar was also boosted after the U.S. Commerce Department reported on Friday that gross domestic product rose at an annualized rate of 0.8% in the three months to March, up from the initial estimate of 0.5%.
Meanwhile, demand for the yen remained under pressure following report Japanese Prime Minister Shinzo Abe may delay a planned sales tax increase for a second time, after a similar tax increase in April 2014 derailed an economic recovery.
EUR/USD edged up 0.21% to 1.1138, off two-and-a-half month lows of 1.1097 hit overnight.
The dollar was higher against the pound, with GBP/USD down 0.14% at 1.4617 but lower against the Swiss franc, with USD/CHF shedding 0.23% to 0.9924.
Earlier Monday, the KOF Economic Research Agency said that its economic barometer rose to 102.9 in April from 102.6 in March, whose figure was revised down from 102.7. Analysts had expected the barometer to rise to 102.8 last month.
The Australian and New Zealand dollars were steady, with AUD/USD at 0.7180 and with NZD/USD at 0.6701.
In Australia, data on Monday showed that company operating profits declined by 4.7% in the first quarter, compared to expectations for a 0.1% rise and after a 2.8% fall in the three months to December.
Elsewhere, USD/CAD gained 0.40% to trade at 1.3072.
Statistics Canada said the country’s current account deficit widened as expected to C$16.8 billion in the first quarter from C$15.7 billion in the last quarter of 2015, whose figure was revised from a previously estimated deficit of C$15.4 billion.
A separate report showed that Canada’s raw materials price index rose 0.7% in April, disappointing expectations for an increase of 2.2% and after a 4.5% gain the previous month.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 95.73, the highest since March 29.