The dollar edged higher Tuesday as investors awaited key U.S. economic data at the end of the week.
The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, recently was up 0.1% at 83.87.
Investors will be keeping an eye on Friday's U.S. employment data for signs of increasing wage growth and other indications that inflation is starting to accelerate, which could bolster the case for the Federal Reserve to raise borrowing costs at a faster pace. Expectations of rising rates tend to boost the dollar by making the currency more attractive to yield-seeking investors.
Such a scenario could help limit the dollar's losses going forward, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange, in a note to clients.
The U.S. dollar has fallen for five straight quarters and is down 7.3% over the last 12 months.