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By Bloomberg

The dollar remained stronger after gaining Tuesday amid rising volatility as the impact of the Federal Reserve’s reduction in interest-rate forecasts waned and investors’ focus turned to data.

The greenback has recovered from last week’s 2.2 percent drop, the steepest in three years. The Bloomberg Dollar Spot Index has weakened almost 3 percent from a decade high reached March 13, after tumbling when the Federal Open Market Committee last week indicated it was in no rush to raise borrowing costs and will monitor data for policy direction.

“Markets’ sensitivity to data is increasing,” said Masafumi Yamamoto, the president of Praevidentia Strategy Ltd., a financial research company in Tokyo. “The Fed is data- dependent but it’s important that we see data confirming weakness in January and February was temporary.”

The Bloomberg Dollar Spot Index was little changed at 1,185.34 at 1:10 p.m. in Tokyo, off Tuesday’s low of 1,179.04. It posted the biggest weekly decline since October 2011 last week. The U.S. currency traded at $1.0934 per euro from $1.0924 and fetched 119.61 yen from 119.76.

Deutsche Bank AG’s CVIX index of volatility was at 10.9 percentage points, more than double its lowest in at least 14 years hit in July 2014.

Data Eyed

“Post-FOMC dollar selling still lingers but there is no change in the trend for a stronger dollar,” said Kazuo Shirai, a Los Angeles-based trader at MUFG Union Bank NA. “Given the Fed’s emphasis on data dependence, volatility will heighten as markets will become sensitive to individual data.”

U.S. reports on Tuesday lent some support to the dollar, with the cost of living excluding food and fuel rising more than forecast in February while new home sales rose 7.8 percent.

“USD saw slight respite from the sudden battering it has taken towards the end of yesterday’s session,” Michael Every, head of financial markets research at Rabobank Group in Hong Kong, wrote in a March 25 report.

U.S. durable goods orders in February probably increased 0.2 percent, according to the median estimate in a Bloomberg survey of economists before a Commerce Department report due Wednesday in Washington.

Orders dropped for two of the past three months against expectations for a rise in line with a full-on recovery in the U.S., Every wrote. “Whether we see the start of a ‘‘V’’ or a continuation of the last leg of an ‘‘M’’ will arguably play a large role in the direction of both USD and bond yields today: either way we can expect significant volatility.”