Investing.com - The dollar pushed higher against a basket of the other major currencies on Tuesday as the euro pulled back from three-year highs scaled amid growing expectations that the European Central Bank could pare back its monetary stimulus this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.34% to 90.44 by 08:43 AM ET (13:43 GMT). The index plumbed a three-year low of 90.05 on Monday.
EUR/USD was down 0.35% to 1.2223, pulling away from Monday’s highs of 1.2296, which was the strongest level since December 2014.
The single currency came under pressure after Reuters reported that the ECB is unlikely to drop a pledge to keep buying bonds at its upcoming meeting next week.
Last week's minutes of the bank's December meeting showed that officials were considering a gradual shift in policy guidance from early this year.
Any changes to the the bank's guidance would likely been seen by investors as an indication that policymakers are preparing to winding down their bond buying stimulus program.
The dollar has weakened broadly recently amid the view that the global economic recovery will outpace U.S. growth and prompt other major central banks, led by the ECB to begin unwinding loose monetary policy at a faster pace than has been expected.
The dollar edged higher against the yen, with USD/JPY rising 0.17% to 110.72, up from the four-month low of 110.32 set on Monday.
Sterling was lower against the dollar, with GBP/USD slipping 0.25% to 1.3758, off Monday’s peaks of 1.3819, the highest since Britain’s vote to exit the European Union in June 2016.
Sterling slid to the day’s lows after data showing that UK inflation slowed in December for the first time in six months, meaning that Britain’s cost of living squeeze eased.
The consumer price index slowed to an annual rate of 3.0% last month, down from November’s six-year high of 3.1% and the first decline since June.
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