Dollar Advances As U.S. Consumer Price Inflation Improves

The U.S. dollar climbed against most major rivals in New York Morning deals on Tuesday, as U.S. consumer prices rose in line with economist estimates in September, adding to hopes for a potential Fed rate hike in December.

Data from the Labor Department showed that U.S. consumer price index climbed by 0.3 percent in September after edging up by 0.2 percent in August.

Excluding food and energy prices, the core consumer price index inched up by 0.1 percent in September after increasing by 0.3 percent in August. Economists had expected core prices to rise by 0.2 percent.

Traders await the third and final U.S. Presidential debate between Hillary Clinton and Donald Trump on Wednesday, which will be held in Las Vegas.

The topics chosen for the debate, to be moderated by Fox News' Chris Wallace, are debt and entitlements, immigration, economy, the Supreme Court, foreign hot spots, and fitness to be president.

With Clinton leading Trump by double-digits in the polls following two successful debates, she is expected to defeat her rival with a solid performance in Wednesday's debate.

Speaking at the Economic Club of New York on Monday, Fed Vice Chair Stanley Fischer warned of the dangers of low interest rate, as it would pose a threat to financial stability.

He said overly accommodative monetary policy over a longer period of time would hurt the economy.

The currency has been trading modestly higher against its key counterparts, except the yen, in the European session.

The greenback reversed from an early 4-day low of 103.68 against the Japanese yen, edging higher to 104.17.The greenback is likely to find resistance around the 106.00 mark.

The greenback that came off from its previous 4-day low of 1.1026 against the euro in the European session climbed further to 1.0980. Continuation of the greenback's uptrend may see it challenging resistance near the 1.08 zone.

A survey by the European Central Bank showed that Eurozone banks are set to tighten credit standards on business lending in the final three months of this year, while they expect to ease the same for housing loans and retain the existing levels for consumer credit.

Credit standards on loans to enterprises are set to be tightened in the fourth quarter, after they were left unchanged in the previous three months, the ECB's Bank Lending Survey said.

The greenback spiked up to a 3-month high of 0.9913 against the Swiss franc, off its early 4-day low of 0.9866. Further uptrend may lead the greenback to a resistance around the 1.02 area.

The greenback trimmed some of its early losses, bouncing off to 1.3093 against the loonie, 0.7660 against the aussie and 0.7182 against the kiwi, from its prior near 3-week low of 1.3055, 2-week lows of 0.7690 and 0.7214, respectively. The next possible resistance for the greenback may be found around 1.32 against the loonie, 0.75 against the aussie and 0.70 against the kiwi.

On the flip side, the greenback fell to a 4-day low of 1.2310 against the pound, following a rise to 1.2175 at 5:30 pm ET. The greenback is seen finding support near the 1.29 region.

Data from the Office for National Statistics showed that U.K. inflation accelerated in September on higher clothing and transport costs.

Inflation rose to 1 percent from 0.6 percent in August. The rate was the highest since November 2014, when it was also 1.0 percent. Inflation was expected to climb to 0.9 percent.

The NAHB's U.S. housing market index for October is slated for release at 10:00 am ET.