The U.S. dollar gained ground against its major opponents in the Asian session on Tuesday, after the New York Fed President William Dudley backed another rate hike this year citing easing financial conditions and quite low level of interest rates.

In an interview with the Associated Press on Monday, Dudley suggested that he prefers another rate hike later this year should the economic growth continue as he expects.

Market expectations that the Fed would begin the process of trimming its balance sheet in September are not unreasonable, Dudley told.

"We do expect as the labor market continues to tighten, to see firmer wage gains and that will ultimately filter into inflation moving up towards our 2 percent objective," Dudley said. "A pretty broad range of evidence that suggests the labor market is quite a bit tighter than it's been in many years. Which is a good thing," he added.

Investors look forward to U.S. retail sales, import and export prices and NAHB housing market index due today, Fed minutes and housing starts on Wednesday, weekly jobless claims, industrial production and leading indicators on Thursday, followed by the University of Michigan's consumer sentiment on Friday for clues about the economy.

The currency has been trading in a positive territory on Monday, as U.S. treasury yields recovered from softer US CPI-led sell-off.

The greenback strengthened to weekly highs of 110.45 against the yen and 0.9755 against the franc, off its early lows of 109.61 and 0.9704, respectively. On the upside, 112.00 and 0.99 are likely seen as the next resistance levels for the greenback against the yen and the franc, respectively.

The greenback climbed to 4-day highs of 1.1752 against the euro, 1.2739 against the loonie and 0.7842 versus the aussie, up from its previous lows of 1.1793, 1.2718 and 0.7877, respectively. The next possible resistance levels for the greenback may be found around 1.16 against the euro, 1.29 against the loonie and 0.77 against the aussie.

The greenback bounced off to 0.7291 against the kiwi, after having fallen to 0.7312 at 9:30 pm ET. The greenback is seen finding resistance around the 0.70 region.

The greenback advanced to 1.2935 against the pound, its strongest since July 20. Continuation of the greenback's uptrend may see it challenging resistance around the 1.28 area.

Looking ahead, U.K. consumer, producer and retail price indexes for July and house price index for June are due to be released later in the day.

In the New York session, U.S. import price index for July, retail sales data for July, business inventories for June, U.S. Empire State manufacturing index for August and U.S. NAHB housing market index for August and Canada existing home sales data for July are slated for release.

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