TOKYO, Jan 11 (Reuters) - The U.S. dollar hovered near the middle of its recent range against major peers on Tuesday as traders looked to incumbent Fed Chair Jerome Powell"s nomination hearing later in the day for new clues on the timing and pace of policy normalisation. In his prepared opening remarks, released Monday, Powell will pledge to prevent high inflation from becoming "entrenched," but will make no mention of plans for the path of monetary policy. However, he will take questions from senators in his bid for a second four-year term. read more The dollar index, which measures the currency against six counterparts, hovered around 95.86 late in the Asian session. It hit a more than 16-month high of 96.938 on Nov. 24 amid increasing hawkishness from Fed policy makers, but has since been stuck between that level and 95.544, despite a continued ramping up of rhetoric that now has Wall Street banks forecasting four quarter-point rate hikes this year. read more TD Securities strategists said it seemed the Fed was of the mindset of "sooner rather than later" for both higher rates and running off its balance sheet after ending bond-buying stimulus - a process dubbed quantitative tightening (QT). "An affirmation of March tightening and early QT should support USD firmness overall, though within well-established ranges," they wrote in a research note. TD expects a first rate hike in June, but said as early as March was also a possibility. Money markets are priced for an increase by May, with two more by November. U.S. December consumer inflation data is due to be released on Wednesday, with headline CPI seen coming in at a red-hot 7% on a year-on-year basis, boosting the case for an early increase in interest rates. Ten-year U.S. Treasury yields rose to an almost two-year high above 1.8% overnight, but provided only muted support for the greenback. The dollar was little changed at 115.26 yen after bouncing off a one-week low of 115.045 on Monday. The euro was about flat at $1.1341, stuck in the middle of its trading range since mid-November. "The failure of the USD to rally despite a growing relative premium of U.S. bond yields over other G10 economies has many talking about what will need to play out to drive the USD higher," Chris Weston, head of research at brokerage Pepperstone, wrote in a client note. The direction for euro-dollar will be set by a closing break on either side of its recent $1.1380 to $1.1270 trading channel, he said. Sterling was stable at $1.3594 after easing back from Monday"s two-month high of $1.36025. The Australian dollar added 0.19% to $0.7188, getting support from local retail sales data that came in much higher than economists forecast. read more