SINGAPORE (Reuters) - The dollar inched higher against a basket of major currencies on Tuesday, while the Australian dollar tumbled after the central bank governor said it could fall further and there was room for more interest rate cuts.
The comments by Reserve Bank of Australia (RBA) Governor Glenn Stevens added to the downward pressure on the Aussie dollar, which slid 1.4 percent on the day to $0.9075.
The Aussie had already been on the back foot ahead of the comments by Stevens, dented by weaker-than-expected Australian building approvals data.
The slide in the Australian dollar helped lend broad support to the U.S. dollar.
The greenback rose 0.2 percent versus a basket of major currencies to 81.79 <.DXY>, edging away from a five-week trough of 81.499 reached on Monday.
"I think the Aussie dollar is running things right now - U.S. dollar strength across the board on the Stevens remarks," said a U.S.-based FX trader.
The dollar edged up 0.4 percent against the yen to about 98.39 yen.
The euro held steady at $1.3258, staying below a five-week high near $1.3297 set Friday on trading platform EBS and chart resistance at $1.3300.
Investors are focusing on major events later this week for clues to the market's direction.
The U.S. Federal Reserve holds a two-day policy meeting starting on Tuesday. The European Central Bank and the Bank of England also hold their policy reviews this week.
Investors are also waiting for second quarter U.S. growth data due on Wednesday and the influential U.S. jobs report for July on Friday.
(Editing by Eric Meijer)
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