By Chelsey Dulaney
The dollar slipped Tuesday as investors adjusted their portfolios heading into the end of the month.
The WSJ Dollar Index, which measures the U.S. currency against 16 others, fell 0.1% to 91.37. The index had been up as much as 0.5% earlier in the day after upbeat economic data.
Vassili Serebriakov, a currency strategist at Crédit Agricole, said investors are selling the dollar against the euro and British pound with just two days left in November. Investors often rebalance their portfolios at the end of the month.
"I don't think the dollar rally is reversing, it's pausing," he said. "Once we get through this month-end selling and move into December, the picture will become more consistent."
The euro rose 0.3%against the dollar, while the pound rose 0.6% against the greenback.
Meanwhile, U.S. data released Tuesday was strong, supporting the case for higher U.S. interest rates.
U.S. gross domestic product was revised upward to 3.2% for the third quarter, its strongest rate in two years, according to the Commerce Department.
Separately, the Conference Board's consumer confidence index rebounded sharply in November after declining in October.
The reports come ahead of key data this week on manufacturing and U.S. hiring.
"Market participants looked to buy the greenback ahead of economic data that could not only cement expectations for the Fed to raise U.S. borrowing costs next month, but could also signal a potentially faster pace of policy normalization in 2017," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in a research note.
In speech Tuesday, Federal Reserve governor Jerome Powell said the case for raising interest rates has strengthened since the central bank's rate-setting committee met earlier this month, lending further credence to the view that the Fed will raise rates at its next meeting in December.
Fed funds futures, a popular tool for traders to bet on U.S. interest-rate policy, show a 96% probability that the Fed lifts rates next month, according to data from CME Group.
The currencies of commodity-exporting nations were mixed Tuesday as investors continue to assess the prospects for an oil-production cut deal ahead of Wednesday's OPEC meeting.
The dollar rose 0.2% against the Canadian dollar and 0.9% against the Russian ruble but fell 0.1% against the Norwegian krone.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
November 29, 2016 16:36 ET (21:36 GMT)
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