NEW YORK (Reuters) - The U.S. dollar rose broadly on Tuesday, on course for its steepest gain against the euro in two weeks following hawkish comments from Federal Reserve officials, and boosted by European political uncertainty.
Cleveland Fed President Loretta Mester said late on Monday she would be comfortable raising rates at this point if the economy maintained its current performance, while Market News International quoted Philadelphia Fed President Patrick Harker as saying that a March rise was on the table.Investors were also awaiting remarks later in the week from Fed Board Governor Jerome Powell, Atlanta Fed President Dennis Lockhart and Dallas Fed President Robert Kaplan. "There is the prospect of a Fed rate hike in March, which although somewhat priced into markets, isn't fully priced into the markets yet," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.Fed funds futures on Tuesday implied that traders saw a 22.1 percent chance of a Fed rate increase in March, according to CME Group's FedWatch program. Solid economic data and rises in U.S. inflation have led Fed policymakers including Chair Janet Yellen to promise a rise in rates soon. The dollar index <.dxy>, which measures the greenback against a basket of six major currencies, was last up 0.4 percent at 101.370 after hitting a six-day high of 101.600 earlier.Against the yen, the dollar was up 0.5 percent