Investing.com - The dollar was hovering at one-week highs against other major currencies on Tuesday as expectations for upcoming rate hikes by the Federal Reserve continued to support demand for the greenback.
The greenback found support after San Francisco Fed President John Williams said on Saturday that the Fed should raise interest rates three times this year given that economy will benefit from tax cuts.
The comments came a day after Cleveland Fed President Loretta Mester said she expects about four interest rate hikes this year, thanks to solid U.S. economic growth and low unemployment.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.21% at 92.27 by 05:15 a.m. ET (09:15 GMT).
The euro and the pound were lower, with EUR/USD down 0.29% at 1.1933 and with GBP/USD sliding 0.31% to 1.3526.
The single currency shrugged off data earlier showing that euro zone economic sentiment improved more than expected last month, while German industrial production increased more than projected in November.
The yen was stronger, with USD/JPY down 0.23% at 112.85 while USD/CHF climbed 0.54% to 0.9824.
Earlier Tuesday, the Bank of Japan trimmed the size of its bond-repurchase offer by 5% in its latest market operation, reminding investors that it will eventually normalize monetary policy.
Elsewhere, the Australian was lower, with AUD/USD down 0.28% at 0.7821, while NZD/USD held steady at 0.7170.
Meanwhile, USD/CAD added 0.12% to trade at 1.2437.