Asian currencies rose, with the dollar mixed ahead of Federal Reserve tips and inflation data

Most Asian currencies edged higher on Tuesday, while the dollar was mixed ahead of key inflation data due later this week that will provide more clues about the U.S. economy and monetary policy.

However, after a string of less hawkish hints from the local central bank, gains in regional currencies remained limited as there were signs that inflation was peaking in much of the region.

China's currency was flat as data showed consumer price inflation missed expectations in March, while producer price inflation continued to fall. The reading suggested a mixed rebound, especially as its manufacturing sector battled slowing demand.

The reading also limited the possibility of the People's Bank of China raising interest rates, which is expected to reduce the attractiveness of the yuan.

The Australian dollar jumped 0.4 percent, making it one of the best performing currencies on the day as data showed an improvement in local consumer sentiment after the Reserve Bank suspended its rate hike cycle earlier this month.

The won rose 0.2 percent even as the Bank of Korea held interest rates steady for the second time in a row at its meeting on Tuesday. The bank has suspended a more than year-long cycle of rate increases amid cooling economic growth and falling inflation.

The Indian rupee fell 0.1 percent, extending losses after the Reserve Bank of India unexpectedly kept interest rates steady last week and signaled a pause in extending the rate hike cycle on the grounds that inflation had peaked.

The dollar was mixed against a basket of currencies, with relatively strong non-farm payrolls data fuelling immediate demand for the green market. The dollar index rose nearly 0.3%.

But dollar index futures, which are also trading at a discount to the green spot on expectations that the Fed has a limited number of rate hikes for the rest of the year, fell 0.2 percent.

The focus this week is on March inflation data and the minutes from the Federal Reserve's March meeting, both of which are due on Wednesday and are expected to provide more clues about the direction of interest rates.

The yen rose 0.2 per cent as improved sentiment dented the currency's safe-haven appeal, while the dovish near-term outlook for Japanese monetary policy also limited appetite for the yen.

The Philippine peso rose 0.2 percent as data showed the country's industrial production beat expectations in February. But the country also posted a surprise trade deficit for the month.