The dollar edged higher on Tuesday, recovering from recent falls, on caution that the Federal Reserve may lay the groundwork for curbing stimulus at a policy meeting this week.
The dollar index, which measures the dollar's value against a basket of currencies, was up 0.1 percent at 81.724, pulling away from Monday's five-week low of 81.499 and holding above chart support at 81.524, the 200-day moving average.
The dollar has retreated over the past few weeks since Federal Reserve Chairman Ben Bernanke stressed a highly accommodative monetary policy was still necessary.
But analysts said traders were wary of selling the dollar heavily due to expectations the Fed will scale back monetary stimulus in the coming months. The U.S. central bank concludes a two-day policy meeting on Wednesday.