The dollar held firm on Tuesday after a solid U.S. housing data and a rise in U.S. bond yields on the back of hopes of an easing of geopolitical tensions.
The currency, however, is likely to need a clearer sign that the Federal Reserve might start raising rates sooner to break above its trading band in the past few weeks, as traders looking focus on comments from Fed officials later in the week at a global central bank conference in Jackson Hole.
The dollar index stood at 81.594, having gained 0.2 percent on Monday, and edging near 11-month high of 81.716 hit earlier this month. “The housing data seems to have had an impact on the dollar. Yet the market is still showing no clear direction yet and I see dollar-selling orders above current levels. It seems better to play ranges,” said Bart Wakabayashi, head of currencies at State Street in Tokyo.