The US dollar traded slightly higher in the Asian session after going through a limited trading session earlier in the week following the President's Day holiday in the United States.
However, on Tuesday, market movements returned to normal with the publication of the minutes of the Reserve Bank of Australia (RBA) meeting during the Asian session and some economic data during the European session.
Investors will next be shown the release of Canadian inflation data and the US manufacturing index in the New York session.
Looking at current market movements, the dollar index which measures the greenback's strength is trading higher at 104.00 against a basket of major currencies.
The Aussie dollar fell slightly, failing to react to the RBA meeting minutes report which showed the central bank tends to be more hawkish in making policy decisions.
At recent meetings, policymakers have discussed raising rates by 25 points or 50 basis points, but have not considered pausing hikes.
In the meantime, the euro and pound also declined amid investor caution towards the release of manufacturing and services data in the coming session.
Looking at the development in the tension between China and the US that may affect sentiment, the incident about the 'spy' balloon is still an issue for both countries.
In which, Washington claimed the action as irresponsible, while Beijing criticized it by saying the US reaction was excessive.
Overall, the market is still in favor of the US dollar following the expectation of a continued rate hike by the Federal Reserve (Fed), but some economic data and geopolitical headlines remain noteworthy.
