The dollar held near one-month highs against a basket of major currencies early on Tuesday, having remained bid in a session made sluggish by public holidays in the United States and Britain. The dollar index .DXY last traded at 96.381, not far from a high of 96.475 set late in the Asian session on Monday, when dollar bulls were still cheering comments from Federal Reserve Chair Janet Yellen.
In a highly anticipated speech on Friday, Yellen made clear the central bank was poised to raise interest rates this year. She said recent softness in economic data was largely due to “transitory factors” including a harsh winter and labor disputes on West Coast ports. “The central scenario still points to a September lift-off,” analysts at ANZ wrote in a note to clients.
“That leaves the USD bulls marginally with the upper hand; we say marginally because markets are already largely expecting the same and you need something additional to trigger fresh momentum.” Yet, Yellen was quick to stress that incoming economic data will be vital in determining the pace of the tightening process.