The dollar pushed to the upper end of the past month's trading range against the euro and Swiss franc today as investors awaited a key speech by Federal Reserve chairman Mr Alan Greenspan.
The US central bank chief is expected to cement expectations for another quarter-point rise in US interest rates this month when he testifies before the House Budget Committee at 3:30 p.m. Irish time.
But with the market already convinced of a September rate rise, analysts said the US currency needed a strong push from upbeat economic data to gain fresh upward momentum.
"Greenspan is likely to say that the soft patch in the economy is over and that more has to be done on interest rates," said Mr Lee Ferridge, head of global currency strategy at Rabobank.
"This could give the dollar a bit of a lift but we need to see the economic numbers back up the rhetoric."
The Federal Reserve has pledged to keep raising US interest rates at a "measured" pace and reiterated its view that the soft patch seen in the second quarter would be short-lived.
Last week, figures from the labour markets showed the US economy generated 144,000 jobs in August but this also failed to dispel worries about the underlying strength of recovery.
Fed officials have continued to send upbeat signals, reinforcing expectations of a similar tone in Greenspan's testimony.
Federal Reserve Bank of Dallas President Mr Robert McTeer said yesterday that a rut hit in the second quarter was due in large part to higher oil prices and the country had now moved on.