The U.S. dollar edged higher Tuesday ahead of key retail sales data and speeches by Federal Reserve officials, as traders looked for clues to better gauge the timing and pace of interest rate cuts.

At 04:20 ET (08:20 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher at 105.125, but still lies below Friday's 1 1/2-month high of 105.80.

Dollar sees volatile trading

The U.S. currency has seen volatile trading over the last week, weighed by cooling inflation readings but then supported by the Federal Reserve reducing the number of cuts projected this year to just one, from three in March.  

Investors are trying to work out when the Federal Reserve will start cutting interest rates, and thus will be studying the retail sales data for May, due later in the session.

Economists are expecting retail salesto have risen 0.3%, after they were unexpectedly flat in April.

Also of interest will be the speeches of a number of Fed officials during the week.

Philadelphia Fed President Patrick Harkerindicated on Monday that investors should probably only expect one interest rate cut this year.

"If all of it happens to be as forecasted, I think one rate cut would be appropriate by year's end," Harker said, after outlining his view that he sees slowing but above-trend economic growth, a modest rise in the unemployment rate, and a "long glide" back to target for inflation as his base case.