Elsewhere, a mixed bout of economic data weighed on the greenback after US housing data fell short of expectations, while industrial production expanded at the fastest pace in more than three years.
The greenback weakened broadly following reports U.S. President Donald Trump shared sensitive intelligence with Russia's foreign minister in a meeting last week.
The Federal Reserve said Tuesday that USA industrial production at factories, mines and utilities rose 1% in April from March, well above expectations for 0.4% increase.
It was down 0.4 per cent on the day at 98.555, down over 5 per cent from its January peak.
With concerns about political risks in the euro zone having receded after centrist Emmanuel Macron was elected France's president over far-right nationalist Marine Le Pen, focus is shifting back towards the outlook for monetary policy.
Sen. Lindsey Graham to President Trump: Stop Tweeting About the Russia Investigation
Asked about the president's tweet at a press briefing Friday, White House Press Secretary Sean Spicer declined to elaborate. The FBI director serves a 10-year term but can be replaced by the president.
The euro hit a fresh 6-month high against the dollar, hitting 1.1146 dollars, and was also higher versus sterling but fell back against the yen.
Commodity currencies took a knock from today's risk-off mood, with the Australian dollar sliding back below the 0.74 level against the greenback, while the loonie weakened to 1.3613 per U.S. dollar.
Against the yen, the dollar fell 0.3 percent to 113.52 yen, edging away from an eight-week high of 114.38 yen set last week.
Asian stocks briefly climbed to a fresh-two year high on Tuesday on the back of an overnight rise in Wall Street, while oil extended gains after major producers Saudi Arabia and Russian Federation said supply cuts needed to continue into 2018.
That political turmoil, analysts said, was playing out via the dollar, whose broad index had risen to 14-year highs earlier this year on the view that Trump's plans for tax cuts and infrastructure spending would boost growth and inflation, but which fell to six-month lows on Tuesday.
Ian Poulter to play PGA Championship after European Tour invitation
Adam Scott secured his fourth top-10 finish at TPC Sawgrass. "I was a little nervous before I played the final round", Kim said. After winning The Players, Kim left Florida with a cool check for $1,890,000. "And never once did he look flustered at all".
Analysts said the controversy around Trump has raised fears that he might not last a whole term and that, even if he did, there were too many distractions for him to be able to successfully push through his economic stimulus programme. The central bank left interest rates at a record low 1.50 percent for a ninth straight month in May after last easing in August 2016.
"We are approaching a short-term resistance as the breadth of this rise is very unhealthy and the market momentum looks exhausted", said Alex Wong, a fund manager at Ample Capital Ltd in Hong Kong, with about $130 million under management. Stocks remain at or near record highs, supported by the strongest earnings season for S&P 500 components since 2011.
Benchmark 10-year notes gained 3/32 in price to yield 2.33 percent, down from 2.36 percent before the data's release. U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 0.4 percent at $49.03 per barrel.
Gold prices extended gains for a fourth day on Tuesday as political troubles and weaker-than-expected housing data in the United States dented the dollar while a more upbeat scenario in Europe lifted the euro. The FTSE 100 index of leading British shares was 0.1 percent lower at 7,519 and near all-time highs.
Apple Releases Security Updates for iPhones, iPads, Macs
Apple Watch users can click on the Watch icon on their iPhones, the scroll down to and tap General, then tap Software Update. You can get the tvOS 10.2 update on your fourth-generation Apple TV via Settings System Software Updates Update Software.