The U.S. dollar climbed against its major counterparts in the Asian session on Tuesday, as U.S. treasury yields rose amid speculation that the tightening of the monetary policy by the Federal Reserve will be gradual.

In his prepared remarks for hearing before Congress, Fed Chair Jerome Powell said that the current surge in inflation is likely to be transitory and it could move back to the Fed's 2 percent target when supply imbalances are resolved.

The Fed chief gave a positive assessment of the labor market, saying that employment should pick up in coming months as vaccinations progress and the economy emerges from the pandemic.

"We at the Fed will do everything we can to support the economy for as long as it takes to complete the recovery," Powell noted.

Powell's remarks soothed some of the concerns about earlier-than-expected tapering and rate hikes by the Fed.

Powell will testify before the U.S. House of Representatives Select Subcommittee on the Coronavirus Crisis later in the day.

Investors digested mixed comments from the Fed officials regarding the outlook for monetary policy.

Dallas Fed President Robert Kaplan said that the central bank should consider withdrawing stimulus "sooner rather than later," while St. Louis Fed President James Bullard hinted at upside risks to inflation that may go higher.

But New York Fed President John Williams said that inflation could move down to around 2 percent next year and in 2023, as bottlenecks and imbalances are likely to subside.

The greenback climbed to a 5-day high of 110.54 against the yen, from a low of 110.21 seen at 8:45 pm ET. On the upside, 112 is possibly seen as its next resistance level.

The greenback reversed from its early session's low of 1.3937 against the pound and a 4-day low of 0.9169 versus the franc, gaining to 1.3892 and 0.9209, respectively. The currency is seen finding resistance around 1.37 against the pound and 0.94 versus the franc.

The greenback edged up to 1.1892 against the euro, 1.2387 against the loonie and 0.7507 against the aussie, after weakening to 1.1920, 1.2357 and 0.7545, respectively earlier in the session. The next possible resistance for the dollar is found near 1.16 against the euro, 1.25 against the loonie and 0.72 against the aussie.

In contrast, the greenback pulled back to 1.6990 against the kiwi, from a high of 1.6963 hit at 1:30 am ET. The greenback is likely to find support around the 0.72 level.

Looking ahead, U.S. existing home sales for May will be published in the New York session.

At 10:00 am ET, Eurozone flash consumer sentiment index for June will be out.

At 2:00 pm ET, Federal Reserve Chair Jerome Powell testifies on the central bank's emergency lending programs and current policies before the House Select Subcommittee on the Coronavirus Crisis, via satellite.

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