The Australian dollar was the surprise loser after Australia’s central bank left the door ajar for a possible cut in interest rates.
The euro was also a beneficiary from the weaker dollar, adding 0.2 percent to $1.1347.
The dollar index against a group of six major currencies was a shade higher at 89.538 after gaining 0.1 percent overnight.
The pound extended its overnight rally and rose to a near seven-week high of $1.4171.
The U.S. dollar paused on Monday after rebounding at the end of last week, when a strong jobs report suggested the currency’s weakness might have gone too far, too fast.
Asian stocks put in a subdued performance on Tuesday as Chinese economic data disappointed and investors pondered.
The dollar drifted sideways on Friday after a week of losses, as markets waited for U.S. jobs data to shake the currency out of recent ranges.
The dollar recouped some losses on Thursday but was still holding near a 2-1/2-year low hit in the previous session as investors readied for U.S.