European session review: USD strengthens as investors prepare for important data releases later this week

USD appreciated against its major rivals in the European session on Tuesday as investors awaited a slew of important U.S. economic data, including the U.S. services PMI on Wednesday and April non-farm payroll reading on Friday, which are expected to provide more clues on the health of the U.S. economy. There are speculations that quick economic recovery could force the U.S. Federal Reserve to hike interest rates and to begin tapering its asset purchases sooner than expected.

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, rose 0.39% to 91.30.

New York Fed President John Williams said Monday that the U.S. economy is positioned to grow quickly this year, helped by "accommodative financial conditions, strong fiscal support, and widespread vaccinations", but added that he saw no urgent need for the .s. central bank to pull back on its aggressive support as the Fed is still far from the goal of maximizing employment and price stability.

Meanwhile, Fed's Chairman Jerome Powell said the economic outlook in the U.S. has “clearly brightened” amid fast vaccinations and fiscal stimulus, but noted that the recovery has been uneven.