The U.S. dollar extended its early rally against its major rivals on Tuesday, as the decline in durable goods orders matched economists expectation in April, triggering speculation that Fed may not delay raising its interest rate.

The Commerce Department released a report showing that durable goods orders dipped by 0.5 percent in April after surging up by a revised 5.1 percent in March.

The drop in orders came in line with economist estimates, while the increase in the previous month was upwardly revised from the originally reported 4.0 percent jump.

Excluding the decrease in orders for transportation equipment, durable goods orders rose by 0.5 percent in April compared to a revised 0.6 percent increase in March.

The U.S. new home sales and consumer confidence reports are due shortly, which could shed more clues about policy outlook.

Traders now focus on the Federal Reserve's monetary meeting on June 16-17, amid doubts that soft patch of data could prompt Fed members to wait raising its near zero rates since 2008.

The currency was on firmer footing this week, as Friday's better-than-expected U.S. inflation data and comments made by Fed Chair Janet Yellen about interest rates increased expectations of interest rate normalization.

The greenback strengthened to 123.18 against the yen, a level untouched since July 2007. The greenback is seen finding upside target around the 124.00 mark. At yesterday's close, the pair was valued at 121.54.

The greenback was trading at 0.9496 against the franc, hovering around early nearly 4-week high of 0.9519. If the greenback continues its uptrend, 0.96 is possibly seen as its next resistance level.

The greenback remained firm at an early 4-week high of 1.0884 against the euro, compared to Monday's closing value of 1.0976. Further uptrend may take the greenback to a resistance surrounding the 1.08 area.

The greenback extended rally to 1.5360 against the pound, its strongest since May 8. The greenback is poised to test resistance around the 1.53 zone. The pair was valued at 1.5466 at Monday's close.

The greenback spiked up to near a 6-week high of 1.2415 against the loonie, near 5-week high of 0.7752 against the aussie and a 2-1/2-month high of 0.7254 against the NZ dollar, bouncing off from its early low of 1.2304, session's low of 0.7839 and a 4-day low of 0.7321, respectively. On the upside, 1.25, 0.77 and 0.72 are seen as next resistance levels of the greenback against the loonie, aussie and the kiwi, respectively.

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