The dollar traded lower versus most of its rivals on Tuesday, weighed by a drop in U.S. Treasury yields amid a cautious global sentiment with political worries in Europe and weaker stock and commodity markets after a long U.S. holiday weekend.
Commodities were under pressure, as U.S. crude oil futures fell below $50 per barrel.
Benchmark U.S. 10-year Treasury yields fell to a more than one-week low, and the dollar was handed another blow by weaker-than-expected U.S. consumer confidence data.
In the euro zone, a drop in inflation in Spain and several German regions coupled with European Central Bank chief Mario Draghi's commitment to continued emergency stimulus initially weighed on the euro.
Signs that elections in Italy may come as early as September also added to the early pressure on the single currency.
The euro bounced back as the greenback struggled. The dollar index has been soft over the last two weeks on concerns over U.S. President Donald Trump's administration.
By the close, the dollar index was down 0.18 percent at 97.26, while EUR/USD rose close to half a percent at 1.1187.
USD/JPY dropped 0.46 percent to 110.73, while USD/CHF slid 0.4 percent to 0.9741.
