The U.S. dollar climbed against its major counterparts in the Asian session on Tuesday, after San Francisco Fed President John Williams downplayed recent slowdown in U.S. inflation and backed one more rate hike by the Federal Reserve this year.

Speaking in Sydney, Williams said that recent softening in U.S. inflation may be due to temporary factors and a strong economic growth would enable the inflation to move back towards bank's 2 percent goal in the next year.

With the latest jobs report pointing to strong U.S. economy, it was a reasonable view to forecast one more rate hike this year and start adjusting the central bank's balance sheet in the next few months, Williams noted.

The Fed Chair Janet Yellen is set to deliver her semiannual testimony on monetary policy to the House Financial Services Committee on Wednesday, and before the Senate Banking Committee on Thursday.

Yellen's speech will be closely watched for assessments on the U.S. economy and indications for further rate hikes in the second-half of the year.

Investors focus on U.S. weekly jobless claims and producer price index on Thursday, as well as the consumer price index, retail sales, industrial production and consumer sentiment on Friday for more clues about the health of the economy.

The greenback was higher on Monday, as upbeat U.S. jobs data backed Fed rate hopes ahead of Yellen's speech this week.

The greenback advanced to 114.48 against the yen, its strongest since March 15. The greenback is likely to find resistance around the 118.00 region.

Data from the the Bank of Japan showed that Japan's M2 money stock rose 3.9 percent on year in June, coming in at 976.6 trillion yen.

That was in line with expectations and up from the downwardly revised 3.8 percent increase in May.

The greenback that closed yesterday's trading at 0.9657 against the franc climbed to a 6-day high of 0.9678. The greenback is seen finding resistance around the 0.98 region.

The greenback edged up to 1.1383 against the euro and 1.2870 versus the pound, compared to Monday's closing values of 1.1399 and 1.2881, respectively. If the greenback extends rise, 1.11 and 1.27 are likely seen as its next resistance levels against the euro and the pound, respectively.

The greenback advanced to near a 3-week high of 0.7225 against the kiwi, compared to 0.7275 hit late New York Monday. The greenback is poised to challenge resistance around the 0.71 region.

The greenback rose to 1.2906 against the loonie, from a low of 1.2885 hit at 10:00 pm ET. On the upside, 1.30 is likely seen as the next resistance level for the greenback.

Looking ahead, at 6:00 am ET, the Bank of England Chief Economist Andy Haldane participates in a panel discussion at the 'Essentials of Numeracy' launch event, in London.

At 7:00 am ET, the Bank of England Deputy Governor Ben Broadbent speaks at the Scottish Council for Development and Industry, in Aberdeen.

In the New York session, Canada housing starts for June and U.S. wholesale inventories for May are due.

At 12:30 pm ET, the Federal Reserve Governor Lael Brainard speaks about normalizing central banks' balance sheets at a conference jointly sponsored by Columbia University and the Federal Reserve Bank of New York.

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