The US dollar is trading strong on Tuesday as markets wait to hear whether and when leading policymakers in the country will react to the rising bond yields. At the time of writing, the US dollar index DXY is trading around 92.04.

So far in Q1 2021, the US dollar has strengthened by as much as 2% against other leading currencies, going against economists’ forecasts for a period of weakness instead, as US Treasury yields rose higher over the past few weeks. In addition, expectations of the US economy posting a faster recovery than several other countries has also boosted investor confidence in the greenback over its peers, especially the Euro.

During the previous session, the dollar index lost around 0.32% of its value and remained mostly unchanged through early trading today. The reserve currency eased lower against safe haven Japanese yen after touching a nine-month high last week while the Euro posted a slight recovery after falling to the lowest level seen in two weeks on Monday.

Later today, the US dollar could experience some volatility after Fed Chair Jerome Powell and US Treasury Secretary Janet Yellen present their congressional testimonies. Of particular interest among traders will be any comments about the rising bond yields or concerns about inflation rising higher following the rollout of the latest round of fiscal stimulus measures.