- The dollar was lower against the euro and the pound on Tuesday as expectations for further monetary easing by the European Central Bank waned, and investors looked ahead to U.K. data on first quarter growth later in the session.

EUR/USD was last up 0.15% to 1.3870, not far from the two-week highs of 1.3878 struck on Monday.

The euro continued to be supported by expectations that the preliminary euro zone inflation report, due for release on Wednesday, would show that consumer prices ticked higher this month.

An uptick in the region’s inflation rate would ease pressure on the European Central Bank to implement additional monetary policy measures.

Germany was to release what would be closely watched preliminary data on consumer prices later in the trading day.

Meanwhile, sterling was holding just below four-and-a-half year peaks against the dollar, with GBP/USD up 0.15% to 1.6832.

Demand for sterling continued to be underpinned by expectations that the Bank of England could raise interest rates in the early part of next year after recent economic reports bolstered the outlook for the broader recovery.

Preliminary GDP data due out later in the session was expected to indicate that economic growth accelerated in the first three months of this year.

Elsewhere, USD/JPY was up 0.13% to 102.61. The dollar remained firmer after data on Monday showed that U.S. pending home sales rose for the first time in nine months in March, indicating that the housing market is picking up.

Market participants were looking ahead to monetary policy statements by the Bank of Japan and the Federal Reserve later in the week. The BoJ was expected to keep the size of its stimulus program unchanged, while the Fed was expected to stick to its current timetable for tapering its asset purchase program.

The dollar was almost unchanged against the Swiss franc, with USD/CHF at 0.8797.

NZD/USD dipped 0.08% to 0.8530. The pair touched three-and-a-half week lows of 0.8522 earlier Tuesday, when data showed that New Zealand posted a narrower-than-expected trade surplus in March.

Meanwhile, AUD/USD was steady at 0.9257, while USD/CAD edged down to a one-week low of 1.1008.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was steady at 79.73.

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