Credit: Investing.com -
Investing.com - The dollar weakened on Tuesday as uncertainty over the timing of the next Federal Reserve rate hike weighed ahead of a speech by Fed Chair Janet Yellen later in the week.
The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, fell 0.25% to 94.29, backing off Monday's highs of 94.94.
The dollar slid lower as investors turned their attention to a speech by Fed Chair Janet Yellen at Jackson Hole, scheduled for Friday.
Market watchers are waiting to see if Yellen will restate the hawkish view of the economy expressed by Fed officials in recent weeks or echo the minutes of the Fed's July meeting, which indicated that officials are divided on when to raise rates.
The dollar had risen on Monday as upbeat comments by Fed officials were seen as boosting the prospects for a rate hike this year.
On Sunday Fed Vice Chair Stanley Fischer said inflation is within "hailing distance" of the bank's 2% target.
The comments came after speeches last week from San Francisco Fed head John Williams and New York Fed chief William Dudley indicating that the central bank thinks the economy is strong.
The U.S. central bank raised interest rates for the first time in almost a decade in December.
Higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.
The euro edged higher, with EUR/USD up 0.16% at 1.1337.
In the euro zone, data earlier Tuesday showed that private sector activity edged up to a seven-month high in August, boosted by surprisingly strong growth in France.
The dollar was also weaker against the yen, with USD/JPY down 0.28% at 100.04.
The pound strengthened, with GBP/USD advancing 0.39% to 1.3185.
In the U.K., private sector data showed that export orders at manufacturing firms rose to the highest level in two years in August, boosted by the weaker pound.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
