Tuesday saw a small increase in the dollar as traders ignored a relatively positive report of consumer prices and attempted to predict whether the Federal Reserve will raise interest rates next week after the failure of two banks caused significant market turbulence.

The dollar index, that gauges the greenback versus its major pairs edged up by0.096% as treasury yields increased the day after the two-year note, which tracks expectations for interest rates, plummeted by the most in a single day since 1987.

Investors are split on whether the Fed would hike rates again next week as a result of Silicon Valley Bank and Signature Bank's failure due to the ongoing steady rise in inflation.

EUR/USD slumped by 0.11% to $1.0717, while the dollar strengthened versus safe-haven currencies like the yen and the Swiss franc.

GBP/USD edged up 1.22% on Monday but was down 0.16% at $1.2162. According to data released on Tuesday, pay growth in the UK decreased in the three months leading up to January.

USD/JPY slipped by1.05% at 134.62 per dollar.