Rates play pushes dollar to 4-month high vs yen, Kiwi dollar falls after quake

The dollar ground higher against the basket of currencies used to measure its broader strength on Tuesday, hitting a four-month high against the yen on the back of the past fortnight's 25 basis-point rise in 10-year U.S. government bond yields. 

The New Zealand dollar fell to its lowest since June 23 after a report of a large earthquake hitting off its South Island, although there were no immediate reports of damage. 

The dollar index rose just over 0.1 percent to 96.138, gaining 0.1 percent against the euro and around a third of a percent to 114.43 yen, its strongest since mid-March.

Central bank events this week will again dominate market attention. 

The Bank of Canada, which is widely expected to raise interest rates after strong signals from its main policymakers over the past month, meets on Wednesday. 

U.S. Federal Reserve chief Janet Yellen gives two days of testimony to lawmakers on Wednesday and Thursday while Bank of England Governor Ben Broadbent speaks later on Tuesday. 

The data since late last week has painted a grim picture of the UK economy, undermining the hints from others at the Bank that a rise in interest rates is likely later this year. 

Canadian bank RBC have a weaker pound against the dollar as their trade of the week. Sterling was roughly stable at $1.2887 and 88.37 pence per euro respectively.