Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate at a three-week high of 6.5288 per dollar, 9 pips firmer than the previous fix of 6.5297.
Analysts expect the loonie, which has gained 1.5% since the beginning of the year, to benefit from a potential reduction by the Bank of Canada of its bond purchases, a Reuters poll showed this month.
Highly anticipated economic data from China on Friday ultimately had little effect on currencies, even as the world's second largest economy posted record 18.3% growth in the first quarter year-on-year.
"We expect real GDP growth to have jumped to 20% year-on-year in Q1 from 6.5% in Q4-2020, led by an overheated industrial sector and a recovering services sector," economists at Standard Chartered said in an earlier note.
The European Central Bank should spell out its tolerance for overshooting its inflation target, ECB policymaker Francois Villeroy de Galhau said on Tuesday.
"Consumers are in a sweet spot at the moment. The labour market is strong, accumulated savings are elevated and it appears households are resilient to a slow vaccine rollout," said CBA economist Belinda Allen.
The consumer price index jumped 0.6% last month, the largest gain since August 2012, after rising 0.4% in February, the Labor Department said on Tuesday. Excluding the volatile food and energy components, the CPI rose 0.3%. The so-called core CPI nudged up 0.1% in February.
The dollar briefly spiked on the data, before reversing course and dipping to three-week lows. Treasury yields also fell after the data.
"Although China's aggregate finance grew at a slower pace than last year, yuan loan growth was faster than a year ago, showing that shadow banking has continued to shrink," Iris Pang, chief economist for Greater China at ING, said in a note.
The dollar's performance has been tied to US Treasury yields for most of 2021, after concern about rising inflation in the United States and a stimulus-fuelled economic rebound triggered a jump in Treasury yields.
The dollar index was last down 0.11% against a basket of currencies at 92.108. It is holding above a three-week low of 91.995 reached on Thursday.
On a more cautious note for the economy, Ontario, Canada's most populous province, initiated a four-week stay-at-home order as it battles a third wave of the COVID-19 pandemic.