U.S. Dollar Strengthens Against Majors

The U.S. dollar climbed against its key counterparts in European deals on Monday, as U.S. treasury yields recovered from softer US CPI-led sell-off and investors await the Fed minutes for more clues about the possibility for a third rate hike later this year.

Easing tensions on the Korean peninsula diminished the demand of safe-haven treasuries, propping up the yields.

Senior U.S. national security officials on Sunday played down the chances of nuclear war with North Korea, but cautioned that the danger is much greater than it was a decade ago.

The benchmark yield on 10-year treasuries rose 2.22 percent, while that of the 2-year equivalent was up by 1.06 percent. Yields move inversely to bond prices.

Investors focus on the minutes from the Fed's latest meeting, due Wednesday, for more clues about the plan to begin reducing its massive $4.5 trillion balance sheet. The minutes are also likely to shed more light on the Fed's plans to raise interest rate in the light of soft inflation.

The greenback showed mixed performance in the Asian session. While the currency rose against the yen and the franc, it held steady against the euro and the pound.

The greenback climbed to a 4-day high of 109.80 against the yen and a 5-day high of 0.9681 against the franc, from its early lows of 109.03 and 0.9615, respectively. On the upside, 111.00 and 0.98 are likely seen as the next resistance levels for the greenback against the yen and the franc, respectively.

The greenback reversed from its early lows of 1.3022 against the pound and 1.1838 against the euro, rising to 1.2972 and 1.1792, respectively. The greenback is seen finding resistance around 1.27 against the pound and 1.15 against the euro.

The greenback bounced off to 1.2713 against the loonie, 0.7869 against the aussie and 0.7290 against the kiwi, from its early low of 1.2667, 6-day low of 0.7919 and a 4-day low of 0.7330, respectively. The next possible resistance levels for the greenback are seen around 1.30 against the loonie, 0.77 against the aussie and 0.71 against the kiwi.