The dollar was trading steady but remains near a two-month high reached late Monday, supported by expectations that the Federal Reserve will shift to cutting interest rates gradually after last month’s jumbo 50 basis-points reduction.
“The rise in U.S. long-term yields, the consequent re-widening of interest rate differentials in favor of the dollar and forward rates no longer viewing the Fed as the bolder central bank in terms of easing are all keeping the [dollar] on bid,” Unicredit Research analysts said in a note.
The DXY dollar index was trading flat at 103.264 after hitting a high of 103.358 on Monday.