The dollar rose for a third straight session on Tuesday as gains on Wall Street and calmer financial markets enhanced appetite for currencies that offer higher yield.
The euro and the yen, currencies with low interest rates used by investors to fund purchases of higher-yielding currencies in risky carry trades, were lower on the day after gains seen in a chaotic first week of the year.
"We're seeing a reversal of what we saw in that first week and the dollar has been benefiting as a result," said Sireen Haraji, currency strategist at Mizuho Securities in New York.
Commodity currencies traded in a back-and forth range as oil gave up initial gains and hit a fresh 12-year low. The Canadian dollar hit its lowest mark since May 2003 against its U.S. counterpart, according to Dow Jones.