By Masayuki Kitano
SINGAPORE (Reuters) - The dollar inched up against a basket of currencies on Tuesday from its lowest level in more than a week as hopes for an easing of global trade tensions pushed U.S. bond yields higher.
The dollar's index versus a basket of six major peers rose about 0.1 percent to 92.647 (DXY), pulling up from 92.243 on Monday, which was its lowest level since May 2.
The benchmark 10-year U.S. Treasury yield edged up about 1 basis point in Asian trading to 3.001 percent (US10YT=RR), after rising 2 basis points on Monday.
The benchmark yield was supported by signs of an easing in trade tensions between the United States and China after U.S. President Donald Trump pledged to help Chinese telecoms firm ZTE Corp (HK:0763), which has been penalized for violating U.S. sanctions with Iran.
The dollar, which hit a four-month index high of 93.416 last week, has lost steam after soft April U.S. consumer price data raised doubts as to whether the U.S. Federal Reserve would raise interest rates as many as four times in 2018.
But some traders remain upbeat about its near-term outlook.
Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore, said he is comfortable remaining long U.S. dollar, with interest rate differentials still likely to work in its favor.
Innes said he would probably remain dollar positive until there is a wave of positive economic data from countries other than the United States, or until the European Central Bank starts to sound "overtly hawkish instead of just tentatively".
The euro edged up 0.1 percent to $1.1932 (EUR=), but remained below Monday's high of $1.1996, which was the common currency's highest level since May 3.
The euro had briefly strengthened on Monday after European Central Bank policymaker Francois Villeroy de Galhau said that the ECB could give fresh guidance on the timing of its first rate hike as the end of its exceptional bond purchases approaches.
Still, some analysts are skeptical of the dollar's upside potential.
"Higher energy and commodity prices globally as well as tightness in labor markets should feed through to inflation and bring back the case of monetary stimulus removal for other majors at some stage," the Maybank analysts wrote in a research note.
"We still look for U.S. dollar gains since mid-April to reverse further," they said.
Against the yen, the dollar rose 0.1 percent to 109.72
Major currencies showed limited reaction to the latest batch of Chinese economic data, which overall showed signs of a further slowing in economic momentum.
Investors are focused this week on speeches by Fed officials, as well as economic indicators such as U.S. retail sales data due later on Tuesday.