The dollar hovered close to a two-week high on Tuesday as investors geared up for a slew of economic data, including Friday's U.S. payrolls, that could influence the size of an expected interest rate cut from the Federal Reserve.

The yen, meanwhile, broke a four-day losing streak against the dollar after media reports cited the Bank of Japan governor reiterating in a document submitted to a government panel on Tuesday that the central bank would keep raising interest rates if the economy and inflation performed as policymakers currently expect.

Japan's yen, which has staged a 10% rally in the last two months - aided in part by official intervention - gained, leaving the dollar down 0.7% at 145.815.

The euro eased 0.13% to $1.1056, not far from Monday's two-week low of $1.1042, while sterling eased 0.17% to $1.3124.

That left the dollar index , which measures the U.S. currency against six rivals, modestly in positive territory at 101.68, just shy of the two-week high of 101.79 it touched on Monday. The index fell 2.2% in August on expectations of U.S. rate cuts.

Investor focus this week will squarely be on the U.S. payrolls data due on Friday after Fed Chair Jerome Powell last month endorsed an imminent start to interest rate cuts in a nod to concern over a softening in the labour market.

Ahead of that, job openings data on Wednesday and the jobless claims report on Thursday will be in the spotlight.

Markets are pricing in a 69% chance of a 25 basis points (bps) cut when the Fed meets on Sept. 17 and 18, with a 31% probability of a 50-bps cut, CME FedWatch tool showed.

Source: Reuters