Investing.com - The dollar traded higher against most major currencies on Tuesday on sentiments interest rate hikes may come sooner rather than later, while the European Central Bank's recent decision to loosen policy also boosted demand for the greenback.
In U.S. trading on Tuesday, EUR/USD was down 0.34% at 1.3547.
Rising Treasury yields, four months of solid monthly jobs reports and other upbeat economic indicators in the U.S. sent investors chasing the dollar on Tuesday.
On Friday, the U.S. Labor Department reported that the economy added 217,000 in May, close to expectations for a 218,000 increase.
It was the fourth consecutive month in which the U.S. economy added more than 200,000 new nonfarm payrolls.
The private sector added 216,000 jobs last month, exceeding expectations for a 210,000 gain.
Meanwhile, Treasury yields in the U.S. continued to rise on expectations that Thursday's retail sales report will come in strong, prompting investors to reevaluate when the Federal Reserve will hike interest rates.
Fed officials have said some time will pass between the time monetary authorities wrap up stimulus programs, currently seen taking place at the end of this year, and when interest rates rise, forecast to take place sometime in 2015.
Uncertainty over the length of that window boosted the dollar, as sentiments began to build that rate hikes may come sooner once the Fed concludes its bond-buying program.
The euro, meanwhile, came under pressure on sentiments that policy will remain accommodative for the foreseeable future.
Last Thursday, the ECB unveiled a package of measures to battle persistently low inflation rates in the euro area, including cuts to interest rates, though markets still haven't rule out further action if inflation rates don't pick up.
The dollar was down against the yen, with USD/JPY down 0.20% trading at 102.33 and up against the Swiss franc, with USD/CHF up 0.23% at 0.8992.
The greenback was up against the pound, with GBP/USD down 0.27% at 1.6757.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD unchanged at 1.0906, AUD/USD up 0.19% at 0.9373 and NZD/USD up 0.36% at 0.8525.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.21% at 80.83.
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