The US dollar began Tuesday's trading session strengthening against most of its major counterparts as traders revised their expectations for an interest rate cut by the Federal Reserve.
According to CME FedWatch data, markets are now pricing in a 61.3% probability of a Fed rate cut in June, down from around 70.1% a week ago.
The US Dollar Index .DXY, which tracks the greenback against six world currencies, was up 0.17% at 105.07.
US stock indexes were mostly lower on Monday as investors worried about the timing of interest rate cuts by the Federal Reserve.
The EUR/USD fell 0.13% to 1.0728, while the GBP/USD rose 0.04% to 1.2522.
Although the UK economy continued to shrink in the fourth quarter of 2023, many analysts have come out with a statement about its expected growth in the first quarter.
Ashley Webb, an economist at Capital Economics, believes that timely indicators suggest that the UK economy probably came out of recession in the first quarter.
The USD/JPY was up 0.06% at 151.72. The pair's rise is being limited by fears of intervention from Japanese officials, Reuters reports.
The Japanese yen strengthened slightly to 151.75 per dollar on Tuesday, after falling to 151.79.
Finance Minister Shunichi Suzuki reiterated on Tuesday that he would not rule out intervening in the currency market to stabilize the yen.
The yen's collapse began after the Bank of Japan decided on March 19 to abandon its negative interest rate policy, in place since 2007, to pull the economy out of years of deflation.
Standard Chartered's Nicholas Chia emphasized that Japanese authorities are in a quandary as they fear they are boxing themselves in by capping the yen at 152 per dollar.
"The rationale for attacking and intervening in the currency markets is mainly to buy time for the yen in the hope that the dollar's strength will weaken and recede," Chia said.
The USD/CNY rose 0.07% to 7.2352 as the strong dollar offset sales of the US currency by China's state-owned banks.
AUD/USD rose 0.11% to 0.6495, while NZD/USD fell 0.03% to 0.5948.
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