Investing.com - The dollar was holding steady near two week highs against a currency basket on Monday supported by expectations for further interest rate hikes this year, while waning geopolitical risk dampened demand for the safe haven yen.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 90.17 by 02:46 AM ET (06:46 AM GMT), not far from the two week high of 90.25 set on Friday.
Demand for the dollar continued to be underpinned after recent comments by Federal Reserve officials indicated rates will continue to rise in 2018 as the economy remains on a steady course.
Expectations of higher interest rates tend to boost the dollar by making the currency more attractive to yield-seeking investors.
The dollar rose to a two-month high against the yen, with USD/JPY climbing to 107.89.
The Japanese currency is often sought in times of market turmoil and political tensions and tends to decline as investor confidence returns.
North Korea said on Saturday it was suspending nuclear and missile tests and scrapping its nuclear test site ahead of planned summits with South Korea and the U.S.
Besides concerns over geopolitical risks, concerns over a trade spat between the U.S. and China also appeared to be easing.
The euro slipped lower against the dollar, with EUR/USD dipping 0.13% to 1.2271.
The euro plumbed two-week lows of 1.2249 against the dollar on Friday after European Central Bank President Mario Draghi reiterated that the bank would be cautious about removing monetary stimulus.
Sterling pushed higher, with GBP/USD rising 0.14% to 1.4021 after ending the previous week down 1.71%.
The pound fell last week after Bank of England Governor Mark Carney indicated that the central bank may not raise interest rates in May after recent weaker-than-expected wage growth and inflation data.