The dollar turned higher against a group of major currencies on Tuesday as Federal Reserve Chair Janet Yellen said the central bank will likely need to raise interest rates at an upcoming meeting with the economy expanding further. The dollar index was last up 0.2 percent at 101.15 after reaching a three-week peak at 101.22 following Yellen's prepared remarks before the Senate Banking Committee.
Before Yellen speech, the dollar slipped against major currencies on Tuesday as investors reined in any expectations for a March rise in US interest rates and US President Donald Trump's national security adviser Michael Flynn quit in a controversy over Russia. In overnight trading, the dollar index retreated from three-week highs after Flynn's resignation raised worries about the Trump administration's ability to implement its economic policies, including a "phenomenal" tax reform, which have been seen as bullish for the greenback and stocks.
The dollar index dipped 0.06 percent to 100.90, above its session low of 100.70 but below its three-week peak of 101.11 struck on Monday. The euro inched up 0.1 percent against the greenback at $1.0608 but down 0.2 percent at 120.31 yen amid political risk and disappointing regional economic data.
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