The dollar rose against a basket of major currencies on Tuesday, rebounding from a five-week low hit earlier in the session, as trade tensions receded and the greenback found support from month-end flows.
The dollar index, which measures the greenback against a basket of six other major currencies, was up 0.41 percent at 89.395, after slipping to a five-week low of 88.942.
"Overall the dollar is seeing a bit of a rebound. A lot of that is due to month-end flows that tend to be supportive of the dollar," said Sireen Harajli, currency strategist at Mizuho in New York. "Investors like to square out their positions that they take during the month by repatriating some of those back into dollar," she said.
Concerns regarding a trade war appear to have abated a little overnight and that too was helping the greenback, Harajli said. Global markets were shaken this month after US President Donald Trump moved to impose tariffs on Chinese goods and Beijing threatened similar measures. But fears of a trade war eased on hopes that the United States and China would begin negotiations.
After a big gain on Monday, the euro had added another 0.3 percent to hit $1.2476 in early European trading, less than a cent off the three-year highs it hit in mid-February, helped by receding worries about a trade war. But the common currency slipped 0.35 percent against the greenback after data showing that lending to euro zone companies slowed last month, and comments by European Central Bank Governing Council member Erkki Liikanen that underlying euro zone inflation may remain lower than expected even if growth is robust.
Sterling fell against the dollar, the Swiss franc and the euro as expectations of selling pressure from a large corporate healthcare deal prompted investors to take profits after a recent rally. The British pound was down 0.56 percent against the dollar.