The U.S. dollar gained 0.67 percent on Tuesday, while the euro edged down to $1.1997.
The U.S. dollar index which measures the greenback against a basket of six major currencies was at an all-time high since January 11, gaining 0.67 percent to 92.24.
Investors Focus on Fed
Investors are now looking to the Fed, who are concluding their 2 day meeting for May. Traders are of the opinion that there will be no changes to any rise in interest rates.
Instead they will be looking for any clues on the Fed’s outlook on inflation and the economy. Rising inflation could cause the Fed to raise interest rates at a faster than expected pace.
Most economists believe that following the Feds meeting in June, there will be a move to increase the interest rates. A projection of three increases in 2018 was forecast at their meeting in December and again in March.
For the first time in four years the yield on 10 year U.S. treasury notes passed the 3 percent level as the index for April gained 2 percent.
Markets Look to U.S. Data
Markets are looking to the publication of the U.S. employment data for April, which will give an indication on the strength of the economy.
Data for U.S. manufacturing showed that it was holding solid in April, in spite of a slight slowdown.
The EUR/USD fell 0.61 percent to 1.1997. According to data released on Monday showed that Germans retail sales declined for four months in a row. This has led to expectations that the stimulus program would not see a scaling back in the near future by the European Central Bank.
Against the yen the dollar was at USD/JPY gaining 0.33 percent to 109.67.
The GBP/USD declined 1 percent to 1.3624 following data that showed that the UK manufacturing sector was at its slowest pace in 17 months.
Overall Economic growth for the first quarter has slowed, according to the report leading investors to believe that the Bank of England would not raise interest rates.
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