The greenback swayed close to a three-month high as projections that Fed will not likely take a dovish stance lingered, whereas the central bank's statement that it could not completely rule out another rate hike pushed the Australian dollar to strengthen.

The dollar index that gauges the greenback versus its major pairs dipped to 104.32, having hit 104.60 on Monday, its best gains since November 104.32.

The index climbed by 3% so far in 2024, post slumping 2% in the previous year.

According to figures released on Monday, the U.S. services sector expanded in January as new orders rose and employment grew, pointing to a robust Kick off to the year for the economy.

Since the start of 2024, traders have been reducing their bets on rate reduction, and as of right now, they are pricing in just a 16% chance of a decrease in March.

EUR/USD steadied at $1.0750.

GBP/USD added 0.11% at $1.25495 but continued near to the seven-week low touched on Monday.

The yen ticked up at 148.44 per dollar, close to the lowest level in two months hit earlier on Monday.