Investors are looking for further indications of the strength of the economy after strong U.S. inflation data on Friday, added to expectations for additional rate hikes by the Federal Reserve this year.
Futhermore, oil prices carried on to decline today after rallying sharply on Monday and as concerns over rising Iranian production following the end of international sanctions resurfaced.
OPEC Secretary General Abdalla Salem El-Badri reported on Monday that oil producers are still "feeling the water" over a possible deal to freeze production.
The greenback declined 0.90% against the Japanese yen, with USD/JPY to trade at 111.89.
The single currency slipped 0.17% against the dollar, with EUR/USD to trade at 1.1012.
Elsewhere, the dollar was higher against the Sterling pound and the Swiss franc, with GBP/USD down 0.29% at 1.4109, not far from Monday’s three-year low of 1.4057, and was lower against the Swiss franc, with USD/CHF retreating 0.77% to 0.9920.
Meanwhile, the Australian dollar was stronger, with AUD/USD up 0.30% at 0.7249, while NZD/USD held steady at 0.6696.
The US dollar rose 0.16% against its Canadian counterpart, with USD/CAD to trade at 1.3730.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 97.36, still close to the previous session’s two-and-a-half week high of 97.61.