The U.S. dollar strengthened against other major currencies in the early European session on Tuesday, as traders bet that the Federal Reserve is likely to raise its interest rate in the policy meeting, due later in the day.

The Federal Open Market Committee will hold a two-day monetary policy meeting, which starts on Tuesday. The economists expect the federal funds rate to raise its rate by 0.25 percent from 0.75 percent to 1.00 percent.

Meanwhile, Friday's robust U.S. jobs report also triggered the investors to expect a rate hike by a quarter percentage point.

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

In the early European trading, the U.S. dollar rose to nearly a 2-month high of 1.2124 against the pound, from an early low of 1.2222. The greenback may test resistance near the 1.20 region.

Against the euro and the yen, the greenback advanced to 4-day highs of 1.0637 and 115.11 from early lows of 1.0662 and 114.76, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.05 against the euro and 117.00 against the yen.

The greenback edged up to 1.0096 against the Swiss franc, from an early low of 1.0070. On the upside, 1.01 is seen as the next resistance level for the greenback.

Looking ahead, Eurozone industrial production for January and German ZEW survey's economic sentiment index for March are due to be released later in the day.

In the New York session, U.S. NFIB small business index and U.S. PPI, both for February, are slated for release.

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