Pending the Fed, the dollar remains close to its highest levels. Investors are looking to this week's Federal Reserve meeting for clues about the policy outlook.

The greenback hovered just below its recent highs on Tuesday as cryptocurrencies fell sharply after attempting to break out of a multi-month range. The dollar fell about 0.3% against the euro overnight. It must be said that the greenback has risen significantly for more than a month, as the markets are wary of the Fed starting to reduce its monetary support, and the data shows that investors are now long in dollars for the first time since March 2020. The dollar traded at $1.1809 per euro and bought 110.27 yen in early Asian trading. The Australian and New Zealand dollars held onto their modest gains overnight.

Rising inflation expectations on Monday pushed US 10-year real yields to a record low of -1.123%, which also contributed to dollar weakness overnight. The US dollar index fell 0.3% overnight and remained stable at 92.584. The pound was above its 20-day moving average and near a one-week high at $1.3827 as early data appeared to show an ebb from Britain's surge in COVID-19 cases. , despite the removal of many social restrictions last week. The Chinese yuan held firm despite the turmoil in equities and was flat at 6.4790 on Tuesday as investors waited for industrial earnings figures expected at 0130 GMT. Bitcoin fell sharply to $37,470 after hitting a high of $40,581 on Monday after Amazon.com categorically denied a report over the weekend that it was preparing to accept cryptocurrencies.