The dollar index, which measures its strength against a basket of six currencies, was last trading at 98.36, nudging up 0.04% after snapping a four-day winning streak on Monday.
“The market isn’t really concerned about what’s happening in the geopolitical front, at least in the near term,” said Rodrigo Catril, currency strategist at National Australia Bank in Sydney.
That environment “lessens the appeal for safe havens and we’ve seen the US dollar on the backfoot,” he added.
Financial markets were volatile after the weekend’s dramatic ouster of Venezuelan President Nicolas Maduro, which sparked volatility in commodity markets. Maduro pleaded not guilty to narcotics charges in a Manhattan federal court on Monday.
The Australian dollar, which is sensitive to commodity prices, was last down 0.1% at US$0.6713, edging back from the top of the trading channel it has sat in for the past two weeks after copper prices hit a record high. The New Zealand dollar was last off 0.1% at US$0.5784.
Against the yen, the dollar was last up 0.2% at 156.72 yen.
The dollar was pressured on Monday by dovish comments from Minneapolis Federal Reserve president Neel Kashkari, a voter on the central bank’s rate-setting committee this year, who told CNBC he sees a risk that the jobless rate could ‘pop’ higher.
Expectations of policy easing edged up after his remarks, though Fed funds futures are still pricing an implied 82.8% probability that interest rates will remain on hold at the US central bank’s next meeting on Jan 27-28, compared to an 83.4% chance on Friday, according to the CME Group’s FedWatch tool.
The greenback felt further pressure as US manufacturing activity contracted more than expected in December, falling to a 14-month low.
“The modest decline in the ISM Manufacturing Index in December confirms that the sector was struggling for momentum around the turn of the year, but we doubt that this will be enough to prevent overall GDP from expanding at a solid pace in the coming quarters,” Capital Economics wrote in a research report.
Against the Chinese yuan trading offshore in Hong Kong, the dollar was last flat at 6.983 yuan.
The euro was 0.1% lower at US$1.1713, while the British pound weakened 0.1% to US$1.3533.
Bitcoin edged 0.2% lower to US$93,900.82, while ether slipped 0.4% to US$3,226.50.