Investing.com - The U.S. dollar reversed earlier losses against a slew of major currencies on Monday, as optimism surrounding a March interest rate hike increased.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, gained 0.03% and traded at 101.15 by 14:50 ET.
The dollar bounced off session lows, after Dallas Fed President Robert Kaplan speech in Oklahoma on Monday reinvigorated hopes of a march interest hike.
Mr. Kaplan reiterated his view that a rate hike should come sooner rather than later in order to curb rising inflation.
According to Investing.com's Fed Rate Monitor Tool 33% of traders expect the Fed to raise interest rates at its next meeting in March compared to only 26% of traders a day earlier.
The sharp turnaround in the greenback comes ahead of an eagerly awaited address by President Donald Trump to Congress on Tuesday.
GBP/USD traded at $1.2438 down 0.2%.
The euro held onto gains during the session, as polls showed that far-right anti-EU leader Marine Le Pen was losing traction in France's presidential race.
EUR/USD gained 0.25% to trade at $1.587 while EUR/GBP traded 0.28% higher at £0.8511.
Meanwhile, the yen slumped against the dollar with USD/JPY up more than 0.5% at 112.80.