On Tuesday, the greenback edged up for a second day, reaching a six-month high against the Japanese yen on anticipation that U.S. rates will rise for longer. At the same time, continued debt ceiling talks left investors on edge.

Several prominent members of the Federal Reserve who spoke on Monday signaled that the central bank still needed to tighten monetary policy.

Traders rose their bets that the Fed funds rate will remain high as U.S. policymakers expressed a desire for higher rates. Markets are currently pricing in a 20% likelihood of a rate hike in June and are projecting the Fed funds rate to be about 4.7% in December.

The dollar index that gauges the greenback versus its major pairs added 0.1% to 103.41, close to the highest level of 2 months touched last week at 103.63.

EUR/USD plunged by 0.2% to $1.0795 is currently down almost 2% for the month versus a higher dollar, erasing gains from the previous two months.

GBP/USD slid 0.3% at $1.24.

USD/JPY ticked up to 138.88, touching the highest level in six months.