Investing.com - The U.S. dollar rose against a basket of the other major currencies on Monday as markets awaited testimony from Federal Reserve Chair Janet Yellen later in the week.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.34% to 101.06, the strongest level since January 20.
Yellen is scheduled to testify before the U.S. Senate on Tuesday and the House on Wednesday and investors will be watching her comments for clues on when the Fed could raise interest rates next.
The dollar was at two-week highs against the yen after a weekend summit meeting between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe went better than feared.
USD/JPY hit highs of 114.17, the most since January 30 and was last at 114.01, up 0.73% for the day.
In the meeting with Abe, Trump avoided repeating accusations that Japan was one of several countries devaluing their currencies to the disadvantage of the U.S.
Abe and Trump also agreed to hold an economic dialogue after Trump withdrew the U.S. from the Trans-Pacific Partnership agreement.
Demand for the dollar was also underpinned after recent remarks from Trump indicated that his administration would soon reform tax policy.
Trump said late last he would be announcing something over the next two or three weeks that would be “phenomenal” on the tax front, without providing any additional details.
The euro fell against the stronger dollar, with EUR/USD down 0.39% at 1.0598.
Markets were continuing to watch events in Greece as efforts continued to reach a deal on its next bailout payment before February 20th.
The single currency also remained under pressure amid fears over the possibility of a Brexit or Trump-style shock result in France’s upcoming presidential election.
The European Commission on Monday upped its growth forecasts for the euro zone over the next two years, but warned that uncertainty about U.S. policies, Brexit and elections in Germany and France would take their toll on the economy.
Sterling was little changed against the greenback, with GBP/USD at 1.2487, off early highs of 1.2540.
Meanwhile, the Canadian dollar was steady against its U.S. counterpart, with USD/CAD at 1.3088 as Canadian Prime Minister Justin Trudeau met with Trump in the White House.
Trump has vowed to renegotiate the North American Free Trade Agreement with Mexico and Canada in order to secure better terms for the U.S.