The U.S. dollar strengthened against the other major currencies in the early European session on Tuesday, as traders await the U.S. jobs data due at the end of the week for fresh clues about the timing of Fed rate hike.

A report from the Commerce Department on Monday showing a notable increase in factory orders in the month of March, also supported the currency.

The Commerce Department said factory orders surged up by 2.1 percent in March following a revised 0.1 percent decrease in February. Economists had expected orders to increase by about 2.0 percent.

Some economists indicate that Federal Reserve may raise interest rates in the second half of the year. A June rate hike is apparently on the table despite first quarter economic weakness, as recent data has hinted that the U.S. job market is heating up in time for summer.

The monthly jobs report due on Friday is likely to be in the spotlight, although reports on service sector activity, international trade, and labor productivity may also attract attention along with a speech by Federal Reserve Chair Janet Yellen.

Meanwhile, traders remain cautious on the whether Greek negotiations would reach into a deal on May 11 eurogroup meeting. Uncertainty over Greece still remains on whether it could make payment.

Greece Labor Minister Panos Skourletis on Monday said in a television interview that the International Monetary Fund, Greece's second biggest creditor after euro zone governments, was pushing the cash-strapped country too hard over labor reforms for an interim deal to unlock frozen bailout aid.

In the Asian trading, the U.S. dollar held steady against its major rivals.

In the European trading today, the U.S. dollar rose to 120.30 against the yen for the first time since April 13, from an early low of 120.02. The greenback may test resistance near the 121.00 region.

Moving away from an early low of 1.5151 against the pound, the greenback advanced to nearly a 2-week high of 1.5088. On the upside, 1.45 is seen as the next resistance level for the greenback.

Against the euro and the Swiss franc, the greenback climbed to a 6-day high of 1.1065 and a 5-day high of 0.9412 from early lows of 1.1150 and 0.9331, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.07 against the euro and 0.97 against the franc.

Looking ahead, U.S. and Canadian trade data for March and U.S. PMI for April are slated for release in the New York session.

At 12:30 pm ET, Bank of Canada Senior Deputy Governor Carolyn Wilkins will address Board of Trade of Metropolitan Montreal.

The Japanese banks will be closed in observance of Children's Day holiday.

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