Investing.com - The dollar continued to mildly recover from sharp losses posted against other major currencies on Tuesday, but gains were expected to remain limited and the greenback was still trading within close distance of a three-year trough.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.36% at 90.45 by 05:15 a.m. ET (09:15 GMT), off Monday's three-year low of 90.05.
The euro and the pound were lower, with EUR/USD down 0.30% at 1.2228, off the previous session's three-year peak of 1.2296, and with GBP/USD shedding 0.25% to 1.3756.
The dollar has been pressured lower by concerns the global economic recovery will outpace U.S. growth and prompt other major central banks, led by the European Central Bank to begin unwinding loose monetary policy at a faster pace than expected.
Expectations that the ECB could soon start to scale back its monetary stimulus program received a boost on Monday after ECB Governing Council member Ardo Hansson said bond purchases could end in one step in September if the economy and inflation develop as expected.
Meanwhile, the pound weakened after official data on Tuesday showed that UK consumer price inflation pulled back from a five-year high in December.
The yen and the Swiss franc were also weaker, with USD/JPY up 0.19% at 110.74 and with USD/CHF adding 0.18% to 0.9647.
Elsewhere, the Australian and New Zealand dollars were lower, with AUD/USD down 0.28% at 0.7944 and with NZD/USD retreating 0.45% to 0.7266.
Earlier Tuesday, data showed that New Zealand's business confidence index fell to -12 in the fourth quarter from a reading og 5 in the three months to September.
Meanwhile, USD/CAD held steady at 1.2437.