The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, edged down to 93.98, not far from Monday's trough of 93.74, the lowest level since October.
The dollar has weakened across the board after recent dovish comments by Federal Reserve Chair Janet Yellen prompted investors to push back expectations on the timing of the next interest rate increase.
Lower interest rates make the dollar less attractive to yield seeking investors.
The dollar showed little reaction to comments from Dallas Fed President Robert Kaplan, who said Monday he is "very open-minded" to deciding whether to raise rates at the bank's June meeting, but ruled out an April rate hike.
The euro pushed higher against the greenback, with EUR/USD up 0.14% at 1.1422, not far from last week's six-month peaks of 1.1453.
The yen eased, with USD/JPY rising 0.2% to 108.15, off Monday's 17-month lows of 107.62.
The euro gained ground against the yen, with EUR/JPY up 0.35% at 123.57.
Japan's chief cabinet secretary said Monday the government was closely monitoring the foreign exchange market and added that the moves in the yen were one-sided and speculative.
But investors stuck to the view that Japan would refrain from any direct action to stem the yen's gains until at least after this week's G20 meetings in Washington.
The yen has strengthened broadly since the start of the year as market turmoil sparked from steep falls in China's stock markets and currency and fears about the health of Europe's banking sector bolstered safe haven demand.
The Bank of Japan shocked markets with its decision to adopt negative interest rates earlier this year, but despite this the yen has continued to strengthen, posing a challenge to the central bank's attempts to shore up inflation.
Sterling ticked higher against the dollar, with GBP/USD up 0.14% to 1.4259 after strong gains in the previous two sessions.
The U.K. was to release what would be closely watched inflation data later in the day.
Source → Forex - Dollar close to 8-month lows, yen eases