While the Chinese yuan experienced tumultuous trading after the nation's central bank unpredictably trim key policy rates, the American dollar slipped lower in early European trade Tuesday but maintained its proximity to recent highs.

The dollar index that gauges the greenback versus its major pairs traded 0.1% down at 102.982 after touching a 1-1/2-month highest level earlier on Monday at 103.46.

Demand for the safe-haven dollar increased after a spate of dismal Chinese economic statistics were published, raising doubts about the health of the global economy.

EUR/USD advanced by 0.1% to 1.0910 prior to the publication of the most recent German ZEW economic sentiment index, which is anticipated to demonstrate that confidence in the biggest economy in the eurozone is still low.

USD/JPY steadied at 145.49, slightly below the session high of 145.60, which was hit earlier. Japanese government intervention was sparked by the dollar's advanced over 145 in the latter part of last year, and traders are now hoping for a similar event to stop the yen's drop.

GBP/USD climbed 0.2% to 1.2710 With the release of the most recent employment statistics for the UK, which revealed that the unemployment rate increased to 4.2% in June while the number of claimants increased by 29,000 in July, indicating that the labor market is beginning to feel the heat of the protracted tightening cycle.