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Dollar Holds Onto Gains with Inflation Report on Tap

Dollar remains moderately higher ahead of U.S. data

Investing.com - The U.S. dollar held onto gains against other major currencies on Tuesday, as investors awaited a highly-anticipated report on U.S. inflation due later in the day.

The dollar initially strengthened after the Labor Department reported on Friday that the U.S. economy added 313,000 jobs last month, beating economists’ forecasts of 200,000. It was the largest monthly increase in one-and-a-half years.

However the report also showed that average hourly earnings rose by just 0.1% in February for an annual rate of 2.6%, down from 2.8% in January.

The slowdown in wage growth dampened eased concerns over inflationary pressures and dampened expectations for four rate hikes by the Federal Reserve this year.

Market participants were looking ahead to the U.S. consumer price inflation report due later in the day, to see if it confirms the expectations created by Friday's jobs data.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.17% at 90.04 by 06:15 a.m. ET (10:15 GMT).

The euro and the pound were lower, with EUR/USD down 0.08% at 1.2329 and with GBP/USD slipping 015% to 1.3885.

The yen and Swiss franc were also weaker, with USD/JPY up 0.71% at 107.17 and with USD/CHF adding 0.17% to 0.9485.

Elsewhere, the Australian dollar was lower, with AUD/USD down 0.08% to 0.7866, while NZD/USD gained 0.42% to 0.7325.

Meanwhile, USD/CAD edged up 0.13% to trade at 1.2859.

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