Dollar Inches Higher Amid Anticipation of Key Economic Data

The dollar climbed to a near two-week high as investors await significant economic data, including U.S. payrolls, which could affect the Federal Reserve's interest rate decisions. Markets predict a 25 to 50 basis points rate cut, contingent on upcoming job reports. The euro and sterling both declined, while the yen and Australian dollar experienced mixed movements.

The dollar inched higher on Tuesday, nearing a two-week peak, as investors braced for a slew of economic data that could impact the Federal Reserve's interest rate decisions. The euro dipped 0.16% to $1.1055, close to its recent two-week low, while sterling eased 0.17% to $1.3124.

The dollar index, which compares the U.S. currency to six major rivals, rose 0.11% to 101.77, just shy of its recent high of 101.79. The index had fallen 2.2% in August amid expectations of U.S. rate cuts. Investors are heavily focused on Friday's U.S. payroll data after Fed Chair Jerome Powell hinted at imminent rate cuts due to labor market concerns.

Market expectations are leaning towards a 69% probability of a 25 basis points cut and a 31% chance of a 50-bps cut during the Fed's September meeting. The job openings data on Wednesday and the jobless claims report on Thursday are also in the spotlight. Other global currencies showed mixed performance, with movements affected by anticipated economic indicators.

(With inputs from agencies.)