The U.S. dollar fell against the euro and yen on Tuesday after a drop in oil prices suggested U.S. inflation would stay low and prevent the Federal Reserve from hiking interest rates at a steady pace this year, while risk aversion also boosted the euro and yen.
Brent crude oil prices fell more than 3 percent on worries about the demand outlook and rising supply, boosting expectations for lower inflation and, in turn, a slower pace of Fed rate hikes. The Fed indicated in December that it expected to hike four times this year.
The dollar fell against the yen after hitting a six-week high on Friday of 121.700 after the Bank of Japan's surprise shift to negative interest rates. The euro hit a session high against the greenback of $1.09400 on Tuesday.