NEW YORK: The dollar rose against the euro on Tuesday, as worries Greece was tilting towards debt default dragged on the euro and U.S. housing data encouraged speculation that the Federal Reserve will soon raise interest rates.
The euro was off 0.40 percent against the dollar. Other major currencies were little changed against the dollar, as Fed policymakers started a two-day meeting and ahead of a news conference and economic outlook statement due on Wednesday.
Greek Prime Minister Alexis Tsipras lashed out at Greece's creditors, accusing them of trying to "humiliate" Greeks and defying warnings Europe is preparing for his country to leave the euro.
The address to lawmakers after the collapse of talks with European and IMF lenders at the weekend was the clearest sign yet Tsipras has no intention of making austerity cuts needed to unlock frozen aid and avoid a debt default within two weeks.
Greece owes 1.6 billion euros to the International Monetary Fund that could potentially leave it out of cash.
The euro was last at $1.1240. It hit a session low of $1.1205 immediately after the Commerce Department said U.S. housing permits for future construction surged to a near eight-year high.
The data underscored strength in housing, a key focus for Fed leaders weighing interest rate increases. The Fed is expected to raise rates later in 2015 after keeping its short-term lending rate near zero since December 2008.
Trading was muted. "There's some positioning ahead of the Fed but most of the market is sitting on its hands, unwilling to take much of a bet," said Mazen Issa, senior forex strategist at TD Securities in Toronto.
The dollar index was last up 0.20 percent, and the dollar was little changed against the yen at 123.40 after trading higher in Asia.
The yen fell after Bank of Japan Governor Haruhiko Kuroda said he had not been making any assessment on nominal yen levels or predicting its future moves in market-moving comments to parliament last week.
Last Wednesday, the yen jumped 2 yen against the dollar after Kuroda told parliament that the Japanese currency was unlikely to fall further on a real effective exchange rate basis as it was already "very weak."
Expectations of monetary policy divergence continue to favor the dollar over the yen and the euro. The Bank of Japan remains on course to expand its monetary stimulus in October, according to a recent Reuters poll.
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