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• The dollar retreated on Tuesday as global equity markets showed some signs of stability after their recent rout, reviving risk appetite that has fuelled bets against the U.S. currency on prospects of its narrowing interest rate advantage.

Still, many market players are not convinced the worst is over, with U.S. bond yields stuck at elevated levels ahead of Wednesday’s U.S. consumer price data that could rekindle worries about inflation.

“I think markets will remain shaky until (Federal Reserve Chairman Jerome) Powell’s congressional testimony on Feb. 28. Markets will try to test him until they hear his thinking,” said a trader at a U.S. bank.

The dollar’s index against a basket of six major currencies stood at 90.1392, having fallen 0.26 percent on Monday and edging away from Thursday’s half-month high of 90.569.

The euro traded at $1.2290, bouncing off last week’s low of $1.2206, though it was still more than two cents below its 3-year high of $1.2538 hit on Jan. 25.

Buying the euro was one of the popular trades earlier this year on the view that the European Central Bank will scale back its stimulus later this year on the back of a strong recovery in the euro zone economy.

Although many market players remain bullish on the euro in the long term, the currency lacks fresh catalysts for further gains amid headwinds from uncertainties ahead of Italy’s election in early March.

In Germany, Chancellor Angela Merkel and the leader of the Social Democrats (SPD) face criticism from within their own parties over a new coalition deal that must still be approved by disgruntled SPD rank-and-file members.

The 10-year U.S. bond yield hit a four-year high of 2.902 percent while the 30-year yield rose to 11-month high of 3.199 percent.

• The Trump administration’s infrastructure proposal released on Monday would speed up the permitting of U.S. natural gas pipelines, including by cutting Congress out of the process for allowing them to cross national parks.

The proposal fits into President Donald Trump’s broader plan to boost U.S. oil and gas development by slashing red tape, something that has cheered industry but raised concerns among environmentalists and Democratic lawmakers.

“At its core the proposal plans to steamroll as many projects to get to yes as fast as possible whether or not there is a robust environmental review,” said Brett Hartl, government affairs director of the Center for Biological Diversity.

• President Donald Trump's new budget might subject your tax refund to another level of scrutiny before you receive it.

The president released his budget Monday for fiscal 2019, proposing $11.1 billion for the Internal Revenue Service, including $2.3 billion for tax filing and compliance applications and $110 million to modernize the agency's computer systems.

"The real question is whether the base level of funding will be sufficient for the IRS to do its job promptly," said Matthew Gardner, senior fellow at the Institute on Taxation and Economic Policy.

For instance, the IRS would have the authority to "correct more errors on tax returns before refunds are issued," according to budget language.

"If this new provision isn't something the IRS can keep up with, there can be consequences in terms of delayed refunds for taxpayers," said Gardner.

This proposed change would reduce the federal deficit by $305 million between 2019 and 2023, according to the budget proposal.

• China will oppose any “unfair and unreasonable” trade measures by countries such as the United States against its steel companies, a Chinese government think-tank said on Tuesday, arguing protectionism will “poison” the industry.

• Bank of Japan Governor Haruhiko Kuroda said on Tuesday cryptocurrencies likely won’t threaten legal tenders like the yen any time soon as they are mostly used for speculative trading, rather than as payments and settlement means.

Kuroda also said the BOJ was closely watching developments in cryptocurrrency trading to ensure they do not erode public trust over the safety of existing settlement systems overseen by the central bank.

• Oil prices rose on Tuesday, lifted by a rebound in global stock markets that followed sharp falls last week.

U.S. West Texas Intermediate (WTI) crude futures were at $59.65 a barrel at 0724 GMT. That was up 36 cents, or 0.6 percent, from their last settlement.

Brent crude futures were at $62.99 per barrel, up 40 cents, or 0.6 percent, from the previous close.

Reference: Reuters, CNBC