U.S. Dollar Advances Ahead Of Inflation Data

The U.S. dollar firmed against its major counterparts in the European session on Monday, as investors brace for key U.S. data this week for additional clarity on the Fed's rate trajectory.

The U.S. consumer and producer price inflation data will likely be in the spotlight this week, along with other reports on retail sales, industrial production and consumer sentiment.

The consumer price index is forecast to climb by 0.4 percent in February after rising by 0.3 percent in January.

Core consumer prices, which exclude food and energy prices, are expected to rise by 0.3 percent in February following a 0.4 percent increase in January.

Currently, markets are pricing in three to four quarter-point (25 bps) U.S. rate cuts, with a 75 percent chance for the first in June.

The greenback advanced to 4-day highs of 0.6596 against the aussie, 0.6160 against the kiwi and 1.3509 against loonie, off its previous lows of 0.6627, 0.6182 and 1.3469, respectively. The next possible resistance for the greenback is seen around 0.64 against the aussie, 0.60 against the kiwi and 1.37 against loonie.

The greenback firmed to 4-day highs of 1.0915 against the euro and 0.8794 against the franc, off its early lows of 1.0948 and 0.8749, respectively. The greenback is seen finding resistance around 1.07 against the euro and 0.90 against the franc.

The greenback was trading at 147.11 against the yen, up from an early low of 146.48. The currency is likely to locate resistance around the 149.00 level.

The greenback edged up to 1.2817 against the pound, reversing from an early low of 1.2862. If the greenback rises further, it is likely to test resistance around the 1.25 region.