The U.S. dollar narrowly retreated from a 2-1/2-month high on Tuesday amid expectations the Federal Reserve would take a measured approach to easing policy, while a close-to-expected U.S. election campaign kept investors on edge.
A stronger dollar, underpinned by rising Treasury yields, continued to weigh on the yen, euro and pound sterling, a theme that has been building in recent weeks as traders trimmed their bets on a rapid rate cut in the US.
The yield on 10-year Treasury notes rose 3 basis points in London to a fresh 12-week high as investors bet on a stronger U.S. economy.
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