The U.S. dollar marched higher in Asia Tuesday as political uncertainty in Spain and Italy rekindled fears about the euro zone’s outlook, pulling investors toward the greenback’s appeal as a safe haven.
The ICE dollar index DXY +0.43% , which measures the greenback against a basket of six major global currencies, climbed to 79.712 from 79.589 in North America late on Monday.
The WSJ dollar index XX:BUXX +0.06% , a gauge of the U.S. currency’s moves against a slightly wider basket, rose to 71.10 from 70.99.
The euro, meanwhile, fell further from highs. Investors locked in recent gains as they considered pressure on Spanish Prime Minister Mariano Rajoy to resign amid allegations that his party accepted secret payments.
Reports that former Italian Prime Minister Silvio Berlusconi was gaining ground ahead of elections in the country also weighed on the currency.
“Caution will prevail in the near term as markets begin to question the veracity of the rally in risk assets registered over recent weeks,” said Mitul Kotecha, global head of foreign-exchange strategy at Credit Agricole.
He said that the service-sector-confidence data, due later in the day from the euro zone, “will also provoke further concerns revealing both continued contraction for most countries and divergence in the bigger economies, namely Germany and France.”