In response to data showing a spike in U.S. home starts, the greenback crept up against the euro, while the Australian dollar dropped after the minutes of its most recent central bank meeting revealed that keeping interest rates constant had been a topic of discussion.

The number of single-family homes built in the United States increased to its highest level in more than a year in May, and the number of building permits issued increased as well, suggesting that the housing industry may be recovering after being severely hit by Federal Reserve interest rate hikes.

Traders will be watching Fed Chair Jerome Powell's semi-annual monetary policy hearing before the Financial Affairs Committee of the U.S. House of Representatives on Wednesday.

The dollar index that gauges the greenback versus its major pairs added 0.22%.

EUR/USD dipped 0.15% to $1.0905 post edging up at 1.0946 in the previous session.

GBP/USD dropped 0.54% to $1.2721 before the release of the inflation data in UK and BoE’s decision.