"At this stage of the cycle, markets are reasonably certain on what the Fed is going to do next and the dollar needs a fresh driver to shake it out of its current range," said Viraj Patel, a currency strategist at ING Bank in London.

Financial markets expect another 40 basis points in rate increases from the US Federal Reserve through the remainder of the year after two rate hikes so far in 2018.

The euro climbed a quarter of a percent higher at 1.1583 on Tuesday after falling to $1.1530 on Monday, its lowest since June 28 after monthly German industrial orders missed forecasts.

The other big mover in currency markets was the Australian dollar which rallied 0.5 percent to a a one-week high at $0.7427 after the central bank kept policy settings on hold.

With the Chinese yuan also showing some signs of stabilising after a recent fall due to escalating trade war concerns between the United States and its trading partners, the Aussie received some support.

However, some analysts see trade tensions supporting the dollar as the United States economy is better placed to handle protectionism than emerging markets, and as tariffs may narrow the US trade deficit.

"There is still a lot of uncertainty on the tariffs. We don't know exactly how much will be implemented and how bad it can get," said Shinichiro Kadota, senior FX and rates strategist at Barclays in Tokyo.

The Turkish lira firmed against the dollar after broadcaster CNN Turk, citing diplomatic sources, reported that a delegation of Turkish officials will head to Washington in two days to discuss an ongoing row between the two NATO allies.

The currency was trading at 5.2750 against the dollar at 0730 GMT on Tuesday.