"The consensus is that it will be a strong number," said Sireen Haraji, currency strategist at Mizuho in New York.
Forecasters expect U.S. retail sales for May to have risen 1.1 percent, according to a Reuters poll. Soft consumer spending in recent months is reported to worry Fed policymakers, who are weighing their first interest rate hike in nearly a decade.
U.S. Treasuries yields were higher, with the two-year yielding 0.7129 percent.
The dollar index, which tracks the greenback against a basket of six major currencies, was last off 0.14 percent at 95.16, well below the high of 96.909 scaled on Friday when the U.S. jobs report was released.
The dollar declined on Monday, in part because of worries U.S. officials may be growing concerned about the economic fallout from a strong dollar.
Read MoreThe dollar looks 'phenomenal.' Here's why - trader
A media report quoted an unnamed French official as saying that President Barack Obama was not comfortable with a strong dollar. While the White House issued a swift denial, many investors used the report as an opportunity to pare long dollar positions.
Several analysts said dollar strength was a hot topic for discussion amongst policymakers in the United States, and that implied the risk of more verbal intervention.
Greece's drawn-out bailout talks kept investors wary. It has submitted alternative proposals to European creditors, a Greek government official said on Tuesday, but its deal with the European Union and IMF expires at the end of this month, and Athens must make heavy repayments by then that may be impossible without funds from the creditors.