Federal Reserve policy meeting also helps keep greenback above 3-year low
The dollar held above a recent three-year low against a basket of major currencies on Tuesday, with traders turning their attention to US President Donald Trump's State of the Union speech and a Federal Reserve policy meeting for catalysts.
The dollar rose 0.1 percent against a basket of six major currencies to 89.430, having pulled up from a low of around 88.43 set last week, its weakest level since December 2014.
Analysts said a renewed rise in U.S. bond yields this week lent some support to the dollar. The U.S. 10-year Treasury yield reached a peak of 2.733 percent in Asian trading on Tuesday, the highest since April 2014, and last stood at 2.712 percent.
The euro eased 0.1 percent to $1.2373, edging away from a three-year high of $1.2538 touched last week.
"There is a pause in the dollar's weakness, at least for now," said Teppei Ino, an analyst at the Bank of Tokyo-Mitsubishi UFJ in Singapore.
Market participants are probably waiting for Trump's State of the Union speech, which was due on Tuesday, for anything further he might have to say about the dollar, Ino said.
Treasury Secretary Steven Mnuchin gave U.S. currency bears a major boost last week with a tacit endorsement of a weak dollar. Trump later tried to row back from those comments, saying he ultimately wants the dollar to be strong.
Trump said on Monday he will address his proposed immigration overhaul in his State of the Union speech as well as his efforts to lower global trade barriers for U.S. exports.
The president will also outline his much-anticipated infrastructure plan in the speech.
Against the yen, the dollar eased 0.2 percent to 108.78 yen, edging back in the direction of a 4-and-a-half-month low of 108.28 yen set on Friday.
A broad pullback in Asian equities dampened risk sentiment and helped give a lift to the yen, said Christopher Wong, senior FX strategist for Maybank in Singapore.
"There could be some degree of risk aversion," Wong said.
The low-yielding yen is a popular funding currency for investments in higher-yielding assets, and therefore tends to benefit when investors trim their risk exposure.
