The greenback edged higher on Tuesday hovering around the highest level touched in two months, as traders considered the prospect of further Federal Reserve interest rate increases as well as the ratification of the U.S. debt ceiling agreement via a split Congress.

The dollar index that gauges the greenback versus its major pairs soared by 0.2% to 104.323, post previously hitting the highest level in two months.

While the U.S. and British stock markets were closed on Monday, the dollar maintained its strength and is on track to post a monthly gain of just under 2.5% as traders prepare for the possibility that U.S. interest rates will stay higher for extended period.

An anticipated 180,000 new jobs should have been added in May, according to the closely awaited monthly U.S. jobs report, which is set to be released on Friday.

EUR/USD slipped fell 0.3% to 1.0691, the stronger dollar is having an impact on the euro, but Spanish inflation surprised to the downside in May, rising 3.2% annually rather than the anticipated 4.4%.

GBP/USD advanced to 1.2345.

USD/JPY edged lower to 140.41, considering that the pair had previously reached a six-month high as U.S.