The U.S. dollar held gains against most major opponents in Asian trading on Monday, as a key gauge of inflation accelerated in April, well above the U.S. Federal Reserve's 2 percent annual rate target.
Data from the Commerce Department showed on Friday that U.S. core personal consumption expenditures index, the Federal Reserve's key gauge of inflation, rose more-than-expected in April.
Core PCE price index grew 3.1 percent year-on-year in April following a 1.8 percent increase in March. The rate was forecast to rise to 2.9 percent.
On a monthly basis, core PCE grew 0.7 percent in April after a rise of 0.4 percent in the previous month. Economists had forecast a 0.6 percent rise.
Key economic data due this week include ISM manufacturing index on Tuesday and ADP private sector employment, initial jobless claims data and ISM services PMI on Wednesday. Friday features all important nonfarm payrolls data.
U.S President Joe Biden on Friday unveiled $6 trillion budget for next year, which proposes spending on infrastructure, education and other initiatives.
But the budget plan is unlikely to get bipartisan support in the Senate, as Republicans criticized that Biden's budget will add to the deficit and debt.
U.S. markets will be closed on account of the Memorial Day holiday.
The greenback recovered to 1.2183 against the euro and 1.4175 against the pound, from its early lows of 1.2204 and 1.4201, respectively. The greenback is likely to face resistance around 1.17 against the euro and 1.37 against the pound.
The greenback ticked up to 0.9009 against the franc, off its prior low of 0.8985. On the upside, 0.91 is possibly seen as its next resistance level.
On the flip side, the greenback pulled back to 1.2065 against the loonie, 0.7737 against the aussie and 0.7260 against the kiwi, after rising to 1.2086, 0.7701 and 0.7231, respectively in prior deals. The greenback is poised to find support around 1.19 against the loonie, 0.82 against the aussie and 0.74 against the kiwi.
The greenback was lower against the yen, at a 4-day low of 109.64. If the greenback extends decline, 105.00 is possibly seen as its next support level.
Data from the Ministry of Economy, Trade and Industry showed that Japan retail sales dropped a seasonally adjusted 4.5 percent on month in April - coming in at 12.200 trillion yen.
That missed expectations for a gain of 2.0 percent following the 1.2 percent increase in March.