The U.S. dollar depreciated against its major counterparts in the Asian session on Tuesday along with treasury yields, as investors await testimony from Federal Reserve Chair Jerome Powell for more hints on timing and the pace of tightening of monetary policy.

In prepared remarks for his confirmation hearing before the Senate, Powell said that the economy is expanding at its fastest pace in many years and the labor market is strong.

The Fed chief asserted that the central bank will deploy its tools to support the economy and to prevent higher inflation from becoming entrenched.

The post-pandemic economy is likely to be different in several aspects, Powell said, adding that the central bank must adjust to those changes and keep pace with an ever-evolving economy.

U.S. consumer inflation data is due on Wednesday, which is expected to reach a four-decade high of 7 percent in December.

Fed Vice Chair nominee Lael Brainard will testify before the Senate on Thursday.

U.S. treasury yields dropped, with the benchmark 10-year yield touching 1.76 percent.

The greenback weakened to 1.1349 against the euro from yesterday's close of 1.1325. If the dollar slides further, 1.15 is possibly seen as its next support level.

The greenback declined to its lowest level since November 4 against the pound, at 1.3619. The GBP/USD pair had ended yesterday's trading session at 1.3575. Further fall in the currency may challenge support around the 1.37 level.

The greenback edged lower to 0.9249 against the franc from Monday's closing value of 0.9271. The dollar is seen finding support around the 0.90 region.

The USD/JPY pair touched as low as 115.12. Next key support for the currency is likely seen around the 112.00 level.

The greenback was down against the loonie, at 1.2634. Immediate support for the currency is likely seen around the 1.24 level.

The greenback pulled back to 0.7193 against the aussie and 0.6779 against the kiwi, after rising to 0.7167 and 0.6754, respectively in early trades. The greenback is poised to challenge support around 0.74 against the aussie and 0.74 against the kiwi.

Looking ahead, at 10 am ET, Jerome Powell will testify before the Senate Banking Committee on the renomination to chair the Federal Reserve Board of Governors for a second term.

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