Trading volume remained moderate amid cautious sentiment ahead of congressional testimony planned by U.S. Federal Reserve Chairwoman Janet Yellen later in the week, they said. While the reaction to the revelation has, predictably, broken along partisan lines, members of the Senate are more likely to concentrate on passing health care legislation after Majority Leader Mitch McConnell said he is delaying the August recess by two weeks in order to get through a legislative backlog.
In the emails, it emerged Veselnitskaya was claiming to hold information that could be "helpful" to the Trump presidential campaign.
The greenback edged down to 1.2865 against the pound, from yesterday's closing value of 1.2845.
The U.S. dollar dropped versus almost every major global currency and hasn't recovered.
German bunds came under renewed selling pressure early in Europe on Tuesday with the increase in yields providing net Euro backing with EUR/USD finding support just above the 1.1380 level. At 0.4%, the figure showed an improvement from the prior month (a decline of 1.8%).
THE QUOTE: "We're in a sort of wait-and-see pattern right now ahead of Yellen's testimony in front of Congress", said Nadia Lovell, U.S. equity strategist at J.P. Morgan Private Bank.
US job growth surged more than expected in June and employers increased hours for workers, suggesting the Fed could stick to its plan for its third interest rate hike this year and begin to reduce its balance sheet despite sluggish wage gains and tepid inflation.
Yellen and other Fed officials have frequently dismissed the idea of using a single rule, saying it is not flexible enough to adjust to changing circumstances in the economy, and the Fed's report has a special section focused on the topic.
Looking at Europe, in a relatively quiet day the euro gained in late USA session last night on the political clutter from Washington. On Tuesday, the contract rose 64 cents, or 1.4 percent, to settle at $45.04 a barrel.
Japanese government bond (JGB) yields had also tracked the rise in their USA and euro zone counterparts.
Investors could be growing concerned about the prospects of tighter monetary conditions as central banks move away from the era of zero interest rates as inflation and growth gather pace, the expert suggested.
Oil prices meanwhile edged higher Tuesday for a second day after last week's losses, supported by an expected drop in USA stockpiles. The American Petroleum Institute reported a fall of 8.13 million barrels, well below the forecasted reduction of 2.9 million and adding to a draw of 5.76 million barrels the prior week.
In commodity markets, oil prices got a reprieve from worries about oversupply after the USA government cut its crude production outlook for next year and as fuel inventories plunged.