• The U.S. Dollar slipped on Tuesday after advancing earlier in the day and re-approaching the one-year high of 95.44 hit on July 19.
The U.S. Dollar Index, which tracks the greenback against a basket of currencies was down 0.02% at 95.17 by 1:30AM ET (05:30 GMT). Overnight, it edged close to the more-than-one-year high of 95.652 reached on July 19, before giving up some of its gains towards the end of the session.
Traders believe recent trade tensions between the U.S. and China may be supporting the dollar, as tariffs may narrow the U.S. trade deficit.
• "There is still a lot of uncertainty on the tariffs. We don't know exactly how much will be implemented and how bad it can get," Shinichiro Kadota, senior FX and rates strategist at Barclays in Tokyo, told Reuters on Tuesday.
"If U.S. economic growth starts to slow down because of tariffs or because past tax-cut effects are waning, then I think the economic performance could fade, which could also lead to fading dollar strength," he said.
• Elsewhere, the Japanese yen also strengthened against the dollar. The USD/JPY pair was 0.08% lower to 111.32 on Tuesday as it struggled to hold onto gains in recent weeks. The pair reached 112.0 last week.
Looking ahead, The U.S. and Japan are expected to have bilateral trade talks in Washington on Thursday.
• Elsewhere, the USD/CNY pair climbed 0.06% to 6.8590 on Tuesday. The onshore yuan is near its lowest since May 2017, while the offshore yuan hit a 15 month low against the dollar on Friday as trade dispute between China and the U.S intensified.
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• EUR/USD is trying to form a double bottom with the June 28 low at 1.1527. After reaching 1.1529 EUR/USD bulls managed to bring the pair back to daily highs above the 1.1550 level. While the main trend is bearish it remains to be seen if the bears have what it takes to re-launch an assault to the 1.1527 level and break below it.
If the bulls manage to close the day on a high note, they have a valid bullish reversal setup on their side while bears still have the argument of the main bearish trend. Bulls are equally trying to breakout of the bearish channel and above the 100 and 200-period simple moving av
• The European Union says new measures are ready to take effect to protect European businesses from the impact of U.S. sanctions on Iran.
The measures aim to save an agreement aimed at curbing Iran's nuclear ambitions after the U.S abandoned the pact. The EU says the pact is important for global security and is trying to keep economic and financial supply lines to Tehran open.
• The U.S.-China trade war is not Beijing's top priority, investment research firm TS Lombard said.
Rather, China is likely focused on more domestic concerns, such as stabilizing its economy and maintaining the power structure, said Jonathan Fenby, the firm's China research chairman.
TS Lombard sees growth in China coming in at a rate of 6.3 percent in the second half of the year, for an average full-year growth of 6.5 percent.
• Japanese workers' inflation-adjusted real wages rose in June at the fastest pace in more than 21 years, fueled by an increase in summer bonuses, government data showed, in an encouraging sign that consumer spending and inflation will pick up.
The 2.8 percent rise in real wages in June from a year earlier was the biggest gain since a 6.2 percent annual increase in January 1997, and followed a 1.3 percent annual increase in May, labor ministry data showed on Tuesday.
• Oil prices rose on Tuesday with re-introduced U.S. sanctions against major crude exporter Iran expected to tighten global supply. Spot Brent crude oil futures were $74.17 per barrel at 0710 GMT, up 42 cents, or 0.6 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were up 30 cents, or 0.4 percent, at $69.31 barrel.
• U.S. sanctions on Iranian crude could soon push oil prices above $90 a barrel, one oil analyst told CNBC Monday, amid heightened energy market fears of a looming supply shock.
"As we go more towards (the fourth quarter) … that's when we really see the risk of prices going well into the 80s and potentially even into the 90s but very critical is how much Iranian production we lose," Amrita Sen, chief oil analyst at Energy Aspects, told CNBC's "Squawk Box Europe" on Monday.
• WTI has penetrated the daily trend line resistance at 6900/6910 and now targets a test of 6940 before the three-week trend line resistance at 7000/7010 where a run of 7045 stops open a target price of 7115. 6870 and 6830/20 ahead of 6780/70 around Friday's lows are key downside targets ahead of the range low at6700/6690.
Reference: Reuters, FXStreet, CNBC
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