The dollar's index against a basket of six major currencies last traded at 93.564, down from a five-month high of 94.058 set on Monday.
The greenback's surge to that Monday peak had marked a gain of 5.4 percent in about a month, compared to a mid-April trough of 89.229, which was its lowest since late March.
A pull-back in U.S. 10-year Treasury yields from seven-year highs set last week has probably prompted traders to book some profits on their bullish dollar bets, said Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore.
"We came a long way...so ultimately we are going to get profit-taking," Innes said.
He noted that while the dollar's near-term outlook still looks positive, one factor worth watching was whether business sentiment and the economic outlook in developed countries other than the United States would start to improve.
Optimism about synchronous global economic growth had been one of the factors that had weighed on the dollar earlier this year.
Over the past month, however, the dollar has been bolstered by generally solid U.S. economic data that has backed the Federal Reserve's monetary policy tightening stance this year, as well as rising U.S. bond yields that bolstered the greenback's yield appeal.
The prospect of a resolution to the U.S.-China trade tensions has further added to the dollar's shine.
The U.S. 10-year Treasury yield last stood at 3.0523 percent , down from Friday's near seven-year high of 3.128 percent.
Against the yen, the dollar eased 0.1 percent to 110.89 yen , down from Monday's four-month high of 111.395 yen.
There was talk of dollar-selling interest among Japanese exporters at levels around 111.00 yen. Market participants also cited dollar-selling by short-term players during Tuesday's Asian trade.
Analysts at Maybank said they favoured being long the dollar against the yen for now.
"Dips in U.S. Treasury yields could be temporary and a rebound could widen yield differentials between U.S. Treasuries and Japanese government bonds and lift the dollar against the yen," the Maybank analysts said in a research note.
They added that U.S. 10-year Treasury yields may have limited room to fall for now, with the market awaiting the minutes of the U.S. Federal Reserve's last policy meeting due to be released on Wednesday.
The euro eased 0.1 percent to $1.1784, but remained above Monday's low of $1.1717, the common currency's lowest level since around mid-November.
The euro has been affected by concerns over political uncertainty in Italy.
This week will bring about a further test for determined euro bulls with the release of "flash" PMI data for May on Wednesday, and markets waiting to see whether the first-quarter slowdown in Europe spilled over to later months.