Investing.com – The U.S. dollar held onto gains against other major currencies on Tuesday, although the greenback’s upward trend was expected to be limited by ongoing concerns over the U.S. deficit.
Sentiment on the greenback remained fragile as the U.S. deficit is projected to climb near $1 trillion in 2019 following the recent announcement of infrastructure spending and large corporate tax cuts.
The dollar has been pressured lower recently by expectations for a faster pace of monetary tightening outside the U.S., which would lessen the divergence between the Federal Reserve and other central banks.
Market participants were looking ahead to the minutes of the Fed’s latest policy meeting, due on Wednesday, for potential indications on the pace of future rate hikes.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.49% at 89.52 by 05:15 a.m. ET (09:15 GMT), the highest since February 14.
Data earlier showed that the German ZEW economic sentiment index fell to 17.8 this month from 20.4 in January, compared to expectations for a decline to 16.5.
Meanwhile, USD/CAD rose 0.28% to trade at 1.2597.