The U.S. dollar moved back to trade little changed against the euro, giving up earlier gains which drove the European currency to an eight-month low against the greenback on U.S. inflation data for June.
The Labor Department said on Tuesday its Consumer Price Index increased 0.3 percent last month after May's 0.4 percent gain. Gasoline accounted for two-thirds of the rise in prices last month. In the 12 months through June, the CPI increased 2.1 percent after a similar rise in May.
The dollar last traded near $1.35 against the euro, after earlier hitting $1.3458, the lowest since November 21.
The Australian dollar was the main mover on developed world currency markets, after the country's central bank chief said he was happy with current interest rate levels and made no attempt to talk down the currency. The Aussie traded 0.2 percent higher on the day at $0.94.
The yen was a touch lower after a couple of days of raised nerves over the situation in Ukraine and Gaza that had driven the traditional safe haven close to its highest in two months against the dollar and a six-month peak against the euro.
Analysts said the day's main event would be U.S. inflation data due later, and they were also focusing on a meeting of foreign ministers in Brussels due to discuss the bloc's attitude to Russia's involvement in Ukraine.