The U.S. dollar erased some of its early gains against its major counterparts in the New York session on Tuesday, as Federal Reserve Chairman Jerome Powell abstained from commenting on monetary policy.

Powell stressed the case for monetary policy independence and noted that price stability is the bedrock of a healthy economy.

"Restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy," Powell said in a speech in Stockholm.

The absence of direct political control over our decisions allows us to take these necessary measures without considering short-term political factors, Powell added.

Hawkish comments from Fed officials lifted the currency in the European session.

Federal Reserve Bank of San Francisco President Mary Daly and her Atlanta equivalent, Raphael Bostic both remarked overnight that the Fed funds target rate would rise above 5% by the middle of the year.

The greenback retreated to 131.82 against the yen and 0.9212 against the franc, off its early highs of 132.48 and 0.9252, respectively. The greenback is seen finding support around 113.00 against the yen and 0.90 against the franc.

The greenback eased to 1.0751 against the euro and 1.2174 against the pound, reversing from its early highs of 1.0711 and 1.2110, respectively. The greenback is likely to face support around 1.11 against the euro and 1.24 against the pound.

The greenback pulled back to 1.3384 against the loonie, 0.6386 against the kiwi and 0.6903 against the aussie, after rising to 1.3428 and 0.6342 and a 4-day high of 0.6860, respectively in early deals. The greenback is poised to challenge support around 1.29 against the loonie, 0.66 against the kiwi and 0.72 against the aussie.

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