In Europe, the focus will be on the pound ahead of U.K. inflation data. Britain's consumer price index (CPI) is forecast to have eased to 0.7 percent in December, hit by an almost 20 percent monthly fall in the price of oil.
A drop below one percent would require BoE Governor Mark Carney to write an explanatory letter to Britain's financeminister and would boost expectations that the bank will wait until the second quarter of 2016 before raising interest rates.
The pound stayed close to 18-month lows on Tuesday, trading at $1.5132, down 0.25 percent on the day. The dollar traded at 118.30 yen after dipping to 117.74, its lowest level since Dec. 17. It was also pegged back by lower U.S. Treasury yields, with the yen getting an additional lift from subdued stock markets.
"U.S. yields are dropping while stocks are looking less robust,'' said Jeremy Stretch, head of currency strategy at CIBC World Markets.