The dollar ticked up to an almost three-week high on Tuesday after some strong U.S. services data and cautious optimism on the tariff front.

President Donald Trump said not all of his threatened levies would be imposed on April 2 and some countries may get breaks, which helped the mood on Wall Street overnight by soothing some fears about a possible slowdown in U.S growth.

The U.S. dollar index notched a fifth straight session of gains, rising 0.15% to 104.46, its highest since March 5.

Meanwhile the euro slipped to $1.0777, around its lowest in three weeks, and was last down 0.1%.

A strong services component in S&P Global's flash U.S. PMI figures on Monday alongside a rotation back into Wall Street stocks helped push up U.S. bond yields, which supported the dollar.

The dollar has rebounded somewhat after falling to a five-month low in mid-March as Trump's

stop-start tariff

campaigns dented company and investor confidence and darkened the outlook for U.S. growth.

Brent Donnelly, president at analytics firm Spectra Markets, said uncertainty remains high.

"The EUR/USD trade has petered out, as have the massive move in rate differentials and relative equity performance," he said.

"The view that tariffs are unambiguously bullish U.S dollar has been challenged by the price action in 2025, and so even when we get the information on what tariffs look like next week, it will be hard to know what we are supposed to do."

CONSUMER CONFIDENCE

Francesco Pesole, FX strategist at lender ING, said U.S. consumer confidence data due later in the day will be key to the direction of the dollar.

"If consumer sentiment doesn't end up falling too much, then perhaps there's a case for the dollar to have a pretty strong rest of the week," he said.

The dollar was last slightly lower against the yen at 150.61 yen, having pulled overnight above 150. It rose to a three-week high of 150.92 yen in the Asia morning.

Investors expect the Bank of Japan to go slow on monetary tightening that could bolster the yen. Minutes of the BOJ's January meeting released on Tuesday showed policymakers discussed the pace of raising interest rates.

Last week, the BOJ kept interest rates steady and warned of heightening global economic uncertainty. But many analysts still expect the BOJ's next move to come in the third quarter, most likely in July.

The Australian dollar seemed to catch support from optimism about Trump's tariff flexibility, and was steady at $0.6286.

Australia's government launched fresh tax cuts on Tuesday and announced other cost-of-living relief in a major push to win back disgruntled voters, although the currency was little moved.

Sterling hovered just above a two-week low at $1.2913, down 0.1%, as traders looked towards Wednesday's spring statement in which Finance Minister Rachel Reeves is expected to cut government spending to meet fiscal rules.

Bitcoin hit a two-week high of $88,771 overnight but was last 1.5% lower around $86,667.

(Reporting by Tom Westbrook and Vidya Ranganathan in Singapore and Harry Robertson in London; Editing by Gerry Doyle and Kim Coghill)