NEW YORK: The dollar rose on Tuesday as Federal Reserve Chairman Jerome Powell provided an upbeat assessment on the US economy while downplaying the impact of current global trade policy discussions on the outlook for further monetary tightening.

Investors were watching Powell's comment on global trade for any hint that it may slow the pace of interest rate increases. When Powell did not dwell on global trade, analysts said that was a green light to buy US dollars.

Powell said in his prepared remarks before the Senate Banking Committee that it would be difficult to predict how trade policy negotiations could impact the US economy. He also said the economy is on the cusp of "several years" in which the job market remains strong and inflation stays around the Fed's 2 percent target.

"When you parse the comments, there's nothing dovish in there," said Richard Franulovich, head of FX strategy, at Westpac Banking Corp in New York.

"The conditions are still solid. He's pretty upbeat on the outlook. The global picture is solid... He rattled off a long list of reasons why you should expect solid growth."

In late morning trading, the dollar rose 0.2 percent at 94.727 against a basket of six major currencies.

The currency rose to a 12-month high of 95.53 in late June and has rallied more than 5 percent in the past three months.

The dollar traded up 0.5 percent against the yen at 112.86 yen.

CONCERNS

The dollar's gains this year have been capped by worries over the intensifying trade dispute between the United States and China, though the concerns have not derailed the greenback's solid performance so far.

The International Monetary Fund warned on Monday that escalating and sustained trade conflicts after US tariff action threaten to derail economic recovery and depress medium-term growth prospects.

Analysts are uncertain how the Fed would react if the trade conflict with China worsens - either with aggressive rate increases because of the inflationary effect of the import tariffs or with a pause in the cycle because of growth dampening.

Other major currencies traded in narrow ranges on Tuesday.

The euro added 0.1 percent against the dollar to $1.1694 after weakening half a percent last week. The pound fell 0.5 percent against the dollar at $1.3165 following weak UK data and after news Prime Minister Theresa May faces yet another challenge in a divided parliament over wording in her Brexit bill.