The US dollar was largely steady on Tuesday as oil prices fluctuated ahead of the release of July's inflation data. The Japanese yen oscillated between minor gains and losses, finishing near flat during the New York afternoon session. The dollar spot index showed little change.

Analysts including Alex Cohen, Stephen Juneau, and Meghan Swiber at Bank of America noted: "As the market works to decipher the Fed's new policy reaction function, Wednesday's CPI data could be a key driver for the dollar's trajectory." They added, "Taken together, market positioning and current pricing of Fed policy suggest that the downside risk for the dollar may be greater." If inflation data proves soft, the market may rule out a September rate hike, which would weigh on the greenback.

USD/JPY traded near 159.30, fluctuating within a range of less than 0.2% after gaining 1% the previous day. Wee Khoon Chong, a strategist at Bank of New York Mellon in Hong Kong, commented: "For this energy-importing economy, high oil prices and rising US Treasury yields remain headwinds."

AUD/USD was nearly flat at 0.7056. The Australian dollar dipped 0.2% after the Reserve Bank of Australia held its policy rate at 4.35%, as expected by the market. NZD/USD slipped to 0.5879. EUR/USD was steady at 1.1541. GBP/USD edged down less than 0.1% to 1.3502.