The dollar index remained largely flat during the session. The yen retreated after rising for four consecutive sessions, following coordinated efforts by Japan and the United States to boost the currency from a 40-year low.

The Bloomberg Dollar Spot Index held steady at 1,205.81.

U.S. Treasury bonds rose on Tuesday, as signs of diplomatic progress in resolving the Iran conflict pushed oil prices lower, reducing expectations that the Federal Reserve will raise interest rates more than once in the coming year.

The dollar/yen pair rose 0.3% to 157.58, recovering earlier losses that occurred when U.S. Treasury Secretary Scott Bessent expressed support for the yen. The yen still declined during the day, partially giving back the gains from its prior four-day rally.

Bessent stated that the yen's weakness exacerbated Japan's inflation issues and increased the risk of a broad depreciation of Asian currencies. He also reiterated that the U.S. supports efforts to stabilize the yen exchange rate.

The historic joint intervention by Japan and the U.S. is shifting market focus to whether the yen can break above the 155 level against the dollar; strategists view this as a key test of whether the yen's current rally can be sustained.

The euro/dollar rose 0.1% to 1.1525.

The dollar/Swiss franc held steady at 0.8101.

The Australian dollar/U.S. dollar gained 0.6% to 0.7040.

Boosted by stronger-than-expected household spending data for June, the Australian dollar strengthened against all G10 currencies.

The pound/dollar rose 0.1% to 1.3441.

The dollar/Canadian dollar increased 0.2% to 1.4075.