2024.01.0914:36:00UTC+00U.S. Dollar Climbs As Rate Cut Hopes Dim

The U.S. dollar moved up against its most major counterparts in the New York session on Tuesday, as investors awaited key inflation data due later this week for clues on the Fed's rate trajectory.

Hawkish comments from Fed officials prompted investors to scale back their expectations for early interest rate cuts by the central bank and lifted treasury yields.

Atlanta Fed President Raphael Bostic on Monday reiterated his expectation of two rate cuts by the Fed this year.

Separately, Federal Reserve Governor Michelle Bowman backed eventual rate cuts if inflation falls further towards the Fed's 2 percent target.

Market participants are pricing in about a 59.1% chance of a rate cut by March, compared with a 69.6% chance last week.

The greenback climbed to 1.2707 against the pound and 0.8520 against the franc, off its early lows of 1.2765 and 0.8464, respectively. The greenback may find resistance around 1.24 against the pound and 0.90 against the franc.

The greenback edged up to 1.0928 against the euro and 0.6234 against the kiwi, from its early lows of 1.0966 and 0.6267, respectively. The greenback is likely to find resistance around 1.06 against the euro and 0.60 against the kiwi.

The greenback was trading at 1.3401 against the loonie and 0.6689 against the aussie, up from its early 4-day lows of 1.3340 and 0.6734, respectively. The next possible resistance for the currency is seen around 1.37 against the loonie and 0.64 against the aussie.

In contrast, the greenback eased against the yen and was trading at 143.87. This may be compared to a previous 5-day low of 143.42. The greenback is poised to challenge support around the 130.5 level.